Final Report

ROAD USER TAXES IN

INDIA
Issues in Tax Policy and Governance

Mahesh C Purohit
Vishnu Kanta Purohit

Foundation for Public Economics and Policy Research

New Delhi-110052

Final Report

ROAD USER TAXES IN

INDIA
Issues in Tax Policy and Governance
(Study Sponsored by Planning Commission, Government of India)

Mahesh C Purohit
Vishnu Kanta Purohit

Foundation for Public Economics and Policy Research

New Delhi-110052

Preface
The Foundation for Public Economics and Policy Research is an
autonomous, non-profit organization whose major functions are to carry
out research, undertake consultancy work, and conduct training in the
areas of public economics and policy.
The Foundation undertook this study with financial support
from the Planning Commission, Government of India. The authors are
grateful to the Socio Economic Research Division of the Planning
Commission for sanctioning this study. However, the Planning
Commission is not responsible for the findings or opinions expressed in
the study.
The main objectives of this study are to evaluate the structure of
all transport taxes levied by the Centre, State and local governments
and to recommend a rational system of taxation to achieve higher
overall growth in the road transport sector. This will, in turn, lead to
growth in trade and industry in the country.
This study is the result of the collective effort of the project
team of the Institute under the guidance of Dr. Mahesh C. Purohit, who
prepared the final draft of the study. We acknowledge the valuable
contributions made by the other members of the team, especially Dr.
(Mrs) Vishnu Kanta Purohit who contributed to the study tremendously
and provided unstinting support, including the preparation of the draft
of the chapters.
Thanks are due to Dr. Amrat Lal Meena for providing excellent
research assistance throughout the tenure of this study and helping in
the analysis of the relevant data and issues. Ms Surajita Rout, Ms
Madhulika and Ms Samarpita Sinha also contributed in some of the
chapters at different stages. In this endeavour, a large number of
organizations and individuals have contributed in various ways to this
study. The team has greatly benefitted from the discussions with the

Transport Secretaries and other officials of the respective State

Governments. The team is grateful to them for finding time to discuss
the issues related to the structure and administration of all the taxes
related to motor vehicles. The authors want to express their gratitude
for the help received in collection of data from Dr. N. A. Khan,
Associate Professor, ICFAI University, Hyderabad; and Mr. Makshud
Ahmed, formerly from RTO, Bikaner, Rajasthan. The team is specially
indebted to Shri T. R. Rustagi, former Director-General of Inspection,
Customs and Central Excise in New Delhi for his help in getting us the
relevant information on customs and excise. In particular, the authors
want to express their gratitude to Dr G. L. Aggarwal for his valuable
insights during the course of work on the project. Special thanks are
due to Dr. B. N. Puri, Senior Consultant (Transport and Tourism),
Planning Commission, for sparing time to discuss various policy issues.
Unstinted support to the work by Dr. Arvind Kumar, Advisor
(Transport Research), Ministry of Shipping, Road Transport and
Highways; and Mr. S. K. Das, Joint Secretary (Transport &
Administration), Ministry of Shipping, Road Transport and Highways,
Government of India, New Delhi, is gratefully acknowledged. Valuable
comments on the Report received at a seminar given at the Planning
Commission from the participants especially from Dr. B. N. Puri and
Dr. Arbind Modi are gratefully acknowledged.
Special mention needs to be made of the help received from late
Mr. J. M. Saxena, former Director, All India Motor Transport
Congress, in providing valuable information from different transport
organisations in the country and also enabling the members of the
research team to personally contact some of the transport operators to
ascertain their views on the subject. The authors are also grateful to Mr.
S. P. Singh, Fellow, Indian Foundation of Transport Research and
Training, New Delhi, for the discussions on various aspects related to
the subject.
Last but not least, the competent secretarial assistance provided
by the administrative staff, especially Mr. Rakesh Kumar, is gratefully
acknowledged.
The Governing Body of the Foundation does not bear any
responsibility for the contents or views expressed in the report. The
responsibility rests with the authors, in particular, the leader of the
team.
New Delhi
October 15, 2010

Mahesh C Purohit
Director

ii

Contents
Page
No.
i
v
vi
vi
vii

Preface
List of Tables
List of Exhibits
List of Annexure
Executive summary
1

Introduction
Trends and Composition of Vehicles in India
The Policy Issues
Objectives and Scope of the Study
Structure of the Report
Fiscal Significance of Road User Taxes
Revenue of Motor Vehicle Tax
Revenue from Passenger and Goods Tax
Revenue from Total Tax on Vehicles
Economics of Road User Taxes
Issues in Road Pricing
Concept of Road User Tax
Why Road User Taxes?
Structure of Taxes on Motor Vehicles
Taxes on the Purchase of Vehicles
Taxes on Ownership of Vehicles
Taxes on the Operation of Vehicles
Toll Charges for Financing of Highways
Road Network Scenario
Financing Highway Development
Reform and Restructuring of Highway Financing
User Fee
Finance Mechanism
Toll Rates
Management of Toll Collection
Eco-taxes for Vehicles
Public versus Private Transport
General Taxes on Motor Vehicles in OECD Countries
Eco-Taxes in OECD Countries
Instituting Eco-Taxes
Purchase Taxation Measures
Circulation Tax Measures
Taxes for Demand Management
Giving New Thrust to Road Fuel Taxes

24

33

104

122

iii

Reforms in the Structure of Road User Taxes

Assessment of the Existing Taxes
Reforms in Road User Taxation
Management of Road User Taxes
Organization for Administration
Structure and Functions
Procedures of Road User Tax
Documentation Formalities for Different Operations
MIS for Road User Taxes
Objectives of MIS
Information Needs Analysis
MIS in Indian States
Activities of an Integrated Information System
Proposed MIS for Motor Vehicles Tax Administration

138

152

205

Pre-Requisites of MIS
216

References

iv

List of Tables
Table No
1.1
1.2
1.3
2.1
2.2
2.3
2.4
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
6.1
6.2
6.3
6.4
7.1
7.2
7.3
7.4
7.5
7.6
7.7

Title
Registered Motor Vehicles in India
Total Registered Motor Vehicles in India (State-Wise)
from 1998 to 2006 (as on 31st March)
Total Registered Motor Vehicles (Category-wise) in the
States/UTs of India (As on 31st March, 2006-Provisional)
Revenue significance of Taxes on Vehicles: All States
Trends in Motor Vehicles Tax in different States
Trends in Passengers and Goods Tax in Different States
State-wise Total Tax on Vehicles
State-wise Tax on Purchase of Motor Vehicle
Road Tax on Motor Cycles in Indian States
Road Tax on Motor Car (Personal) in Indian States
Road Tax on Ordinary Private Stage Carriage in Indian
States
Road Tax on Goods Carriages in Indian States
Fees for Fitness Certificate in Indian States
Taxes on Fuel at the Centre and States level
Goods and Passenger Tax in Indian States
Driving License Fee Structure in Indian States
State Level CO2 Emissions: 2000
Contribution from Vehicle Exhaust to the Total Pollution
Load (%)
Application of Economic Instruments in Various
Countries
Rates of UK Vehicle Excise Duty from 1st May 2009
Incidence of Tax on Motorcycle in India
Incidence of Tax on Motor Car (Personal) in India
Incidence of Tax on Ordinary Private Stage Carriage
Incidence of Road Tax on Goods Carriages
Tax on Motorcycle in India
Tax on Motor Car (Personal) in India
Tax on Ordinary Private Stage Carriage

Page
No.
2
4
5
10
12
17
23
35
39
40
42
43
47
48
50
54
123
124
133
136
139
140
141
142
145
146
147

List of Exhibits
Exhibit No.
2.1
2.2
6.1
8.1
8.2
8.3
9.1

Title
Total Tax on Vehicles and its Components as percent of
SOTR
State-wise Total Tax on Vehicles as a Percent of SOTR
Deviation in the National Ambient Air Quality Standards
Organization for Administration of MVT: Illustration of
Haryana.
Organization Chart of Transport Department of Orissa
Organization Chart of Transport Department of UP
Proposed MIS for Road User Taxes in India
List of Annexure

Annexure No.
A.4.1
A.4.2
A.4.3
A.4.4
A.4.5
A.4.6
A.4.7
A.7.1
A.8.1
A.8.2

Title

Page
No.
61
66
76

Structure of Registration Fee in Indian States

Structure of Permit Fee in Indian States
Structure of Motor Vehicle Tax in Indian States
(for Two Wheelers)
Structure of Motor Vehicle Tax in Indian States
(for Three Wheelers)
Structure of Motor Vehicle Tax in Indian States
(for Non-Transport Four Wheelers)
Structure of Motor Vehicle Tax in Indian States
(for Goods Vehicles)
Structure of Motor Vehicle Tax in Indian States
(for Passenger Vehicles)
Assumptions for calculating tax burden on newly
purchased vehicle for the first year of purchase
Description of Forms Prescribed under Motor
Vehicle Act
Commonality of Data in Various Forms under
Motor Vehicle Act

77
79
84
95
151
164
179

vi

Page
No.
19
19
123
161
162
163
215

Executive Summary
Road transport is a basic mode of transport for people to travel
and to carry goods. Its capacity needs to be enhanced and road quality
has to be improved to cope with the increasing pressure of road traffic.
Over time, the number of personalized vehicles has increased
significantly, causing concentration of vehicles in cosmopolitan towns
and increase in air pollution.
Revenue from taxation of motor vehicles is one of the
increasing sources of revenue for the States. Levied primarily as a
regulatory measure, it has over the years attained importance as an
elastic source of revenue for the Government. With a growth rate of
13.3% and a 1.08 buoyancy during 1993-94 to 2007-08, taxes on motor
vehicles has contributed 7.7% to the States own tax revenue.
Road user taxes play an important role in achieving a desired
level of growth in the number of vehicles and investment in roads. The
existing structure of taxes on motor vehicles, however, is uneven with
no regard for its economic effects.
Both Central and State Governments impose taxes on vehicles.
These are levied at the time of purchase, or for having ownership and
when the vehicle is used. The major taxes levied include customs duty,
CenVAT, and central sales tax levied by the Central Government;
motor vehicles tax, passengers and goods tax, state VAT, and toll taxes
levied by the State governments.
The existing structure of road user taxes is characterized by its
multiplicity. It shows wide variations in tax rates. First, there are
differing schemes for classification of vehicles. Second, there is no
uniformity in the bases of various levies. Third, the tax is at times
specific while in some cases it is ad valorem. Finally, in some States
there is a one time levy and in others, there is an ad valorem levy
payable every year. In fact, it is difficult to make comparisons of rates
levied on different types of vehicles in different States.
It is, therefore, recommended that uniformity be introduced in
the tax system in all the States. Implementation of a one-time road tax
in all the States would be useful. However, keeping in view the issues
of pollution emission through vehicles, the one time tax should be
limited to the first ten years of the life of the vehicle. Thereafter, based
on the emission of the vehicle and its age, the charge should be
graduated over time. The vehicle should be condemned after 20 years

vii

of life. Both the motor vehicle and passengers & goods tax must be
levied through one tax. The rate of the tax must be ad valorem. The tax
should be based on cost of purchase of vehicles with additional factors
of (i) occupancy and (ii) length of routes or goods carried. The
purchase price, which automatically flows in from the manufacturers,
would take away the discretion of the administrative assistant or the
officer dealing with assessment of tax liability of vehicles. The tax
liability should be indicated through a ready reckoner.
Some incentives could be built into the tax system to motivate
States to use road taxes as an instrument to achieve certain policy
objectives. First, these taxes could be introduced in such a way that
they encourage the use of multi-axle vehicles. This is important in the
context of over-loading of two-axle vehicles and their consequent
damage to the roads. Transportation of heavy loads without causing
excessive damage to pavement can be best achieved by using multiaxle vehicles. Second, the tax concession should be used to bring about
noise-reduction and high value vehicles. That is, the tax rate could be
inversely related to noise pollution and positively to the value of
vehicles. Third, for abatement of pollution, it is recommended that a
presumptive tax be levied for restricting the use of private vehicles and
a well designed purchase and circulation tax levied to encourage
cleaner car technologies and fuels to reduce vehicle emissions. Fuel
duties can be used to reduce traffic as well as pursue other
environmental policy goals related to transport.
There has to be uniformity in the administrative organization as
well in operations. A review of documentations required for
administration of vehicle taxes suggests that there exists a plethora of
Forms. These could be rationalized. A committee to look into all the 58
Forms should be appointed. A single window system for providing all
services must be introduced. At the same time, use of management
information system (MIS) with a proper information flow for traffic
flows, resource cost of transport services, and operational data of
transport is the need of the hour.

viii

1
Introduction
The efficiency and economy of motorized road transport
operations are, to a great extent, affected by the road system. Almost
all consumer and industrial goods are transported by road. Road
transport is, therefore, a basic mode of transport for people to travel
and for carrying goods.
Trends and Composition of Vehicles in India
In India, over 87 percent of passengers and over 65 percent of
freight travel on roads. This is expected to increase further in the
future. To cope with the increasing pressure of road traffic it is
necessary to improve the quality and enhance the capacity of the roads.
The Government is, however, finding it increasingly difficult to
maintain the existing road system, besides providing for enhanced road
capacity. This is mainly due to the inadequacy of resources to meet the
growing requirements of the road transport system.
Another issue for efficient motorised transport operations is the
adequacy of the present system to handle increasing traffic and to
maintain the existing road net work. That is, the number of transport
vehicles should be consistent with the increased load of goods and
passengers.
Over the years, the number of registered vehicles has recorded
a spectacular increase, for private as well as commercial vehicles. The
upward trend in the registration of vehicles indicates that while in 1971
the total number of vehicles was 18.65 lakh, the number has gone up to
53.91 lakh in 1981 and to 337.86 lakh in 1996; this further increased
by more than two and a half times by the year 2006 (896.18 lakh). The
growth over the period 1970-71 to 2006-07 has been 12.37 percent per
annum (Table 1.1).
The breakup of the overall increase in the number of vehicles
suggests that there has been a significant increase in the number of

Table 1.1 Registered Motor Vehicles in India

In thousands
Other
Year
All vehicles
Two-wheelers Cars & Jeeps Buses
Goods Vehicles
Vehicles*
1971
1865
576
682
94
343
170
1972
2045
656
740
100
364
185
1973
2109
734
709
95
308
263
1974
2327
838
768
105
323
293
1975
2472
946
766
114
335
311
1976
2700
1057
779
115
351
398
1977
3260
1415
878
119
383
465
1978
3614
1618
919
124
403
550
1979
4059
1888
996
133
444
598
1980
4521
2117
1059
140
473
732
1981
5391
2618
1160
162
554
897
1982
6055
3065
1243
173
613
961
1983
6973
3654
1385
185
675
1074
1984
7949
4351
1455
199
742
1202
1985
9170
5179
1607
223
822
1339
1986
10577
6245
1780
227
863
1462
1987
12618
7739
2007
245
984
1643
1988
14818
9300
2295
269
1114
1840
1989
16920
10965
2486
278
1179
2012
1990
19152
12611
2694
298
1238
2311
1991
21374
14200
2954
331
1356
2533
1992
23507
15661
3205
358
1514
2769
1993
25505
17183
3361
364
1603
2994
1994
27660
18899
3569
392
1691
3109
1995
30295
20837
3841
423
1794
3406
1996
33786
23252
4204
449
2031
3850
1997
37332
25729
4672
484
2343
4104
1998
41368
28642
5138
538
2536
4514
1999
44875
31328
5556
540
2554
4897
2000
48857
34118
6143
562
2715
5319
2001
54991
38556
7058
634@
2948
5795
2002
58924
41581
7613
635@
2974
6121
2003
67007
47519
8599
721@
3492
6676
2004
72718
51922
9451
768@
3749
6828
2005
81501
58799
10320
892@
4031
7457
2006 (P)
89618
64743
11526
992@
4436
7921
Gr. Rate
12.37
15.00
8.76
6.99
8.44
11.31
Notes: *: Others include tractors, trailers, three wheelers (passenger vehicles)/ LMV and other
miscellaneous vehicles which are not separately classified.
@: includes omni buses; (P): Provisional
Source: Government of India (2009), Road Transport Year Book, 2006-07, Ministry of Shipping, Road
Transport & Highways, New Delhi.

personalized modes of vehicles, viz. cars, jeeps, two-wheelers etc. With

rising income and an inadequate urban public transport system,
personalized mode of transport is likely to grow faster in the coming
years. These vehicles increased from 12.58 lakh in 1971 to 37.78 lakh
in 1981 and further to 274.56 lakh in 1996; in the year 2006, the
number stood at 762.69 lakh recording a growth rate of 13.19 percent
during 1971 to 2006.

The growth in the number of commercial vehicles (goods

vehicles and passenger buses) has, however, been moderate (8.14
percent per annum). While the number of such vehicles was 4.37 lakh
in 1971, it had gone up to 7.16 lakh in 1981and to 24.80 lakh in 1996.
The number increased to 54.28 lakh in 2006. Thus, while the growth in
the number of all vehicles during the period 1970-71 to 2006-07 has
been 12.37 percent, the growth in the number of passenger buses and
goods vehicles has been only 6.99 percent and 8.44 percent,
respectively.
The distribution of vehicles amongst the States indicates
unequal dispersion. As on 31st March 2006, Maharashtra registered the
highest number of vehicles (109.66 lakh), followed by Tamil Nadu
(100.54 lakh) and Gujarat (86.22 lakh) (Table 1.2). The number of
registered vehicles was 79.8 lakh and 72.2 lakh in Uttar Pradesh and
Andhra Pradesh, respectively. In the other States, the number was
between 10 and 30 lakh. Among the Union territories, Delhi had the
highest number of vehicles (44.9 lakh). Category-wise number of
registered motor vehicles in the States are given in Table 1.3.
While the increase in the number of registered vehicles causes
concentration of vehicles and also puts stress on the available meagre
infrastructure of highways and other motorable routes, it is important
to note that the trend of increase in registration of vehicles in a State
does not necessarily indicate that all the vehicles registered in the State
ply in that particular State only. As a matter of fact, registration of a
vehicle is affected by the tax policy of that State. A lower tax rate in a
State vis-a-vis the other States, especially the neighbouring States,
encourages registration of vehicles in the State with the low tax rate.
Thus, the taxation of transport vehicles plays an important role in
achieving a desired level of growth in the number of such vehicles.
This has earlier been highlighted in the Report of the Keskar
Committee1 as well in the reports of the Jha Committee2 and the
Pandey Committee3. However, the complexities of the structure of road
taxation and the related issues have not been given due emphasis in
recent years.

Government of India (1967), Interim Report of the Road Transport Taxation

Inquiry Committee on Inter-State Transport, Ministry of Transport and Shipping,
New Delhi.
2
Government of India (1978), Report of the Indirect Taxation Inquiry Committee,
Ministry of Finance, New Delhi.
3
Government of India (1980), Report of the National Transport Policy Committee,
Planning Commission, New Delhi

Table 1.2: Total Registered Motor Vehicles in India ( State-wise) from 1998 to 2006 (as on 31st March)
(In thousands)
STATES / UTs
STATES
Andhra Pradesh
Arunachal Pradesh
Assam
Bihar
Chhattisgarh
Goa
Gujarat
Haryana
Himachal Pradesh
Jammu & Kashmir
Jharkhand
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Manipur
Meghalaya
Mizoram
Nagaland
Orissa
Punjab
Rajasthan
Sikkim
Tamil Nadu
Tripura
Uttarakhand
Uttar Pradesh
West Bengal
TOTAL STATES

1998
3100
21
409
1505
268
4206
1224
150
217
2804
1508
2832
5040
65
51
20
117
810
2296
2200
10
3614
43
3775
1485
37770

1999

3301
21
406
1599
292
4680
1410
150
217
3067
1508
3124
5518
72
54
20
130
876
2296
2444
11
4074
43
4027
1604
40944

2000

**
*

**

**

3636
21
453
871
319
5189
1733
193
299
3393
1782
3457
6114
77
58
27
145
982
2296
2712
12
4611
45
4627
1690
44742

2001

*
#

**

3966
21
542
949
857
341
5576
1949
217
330
909
3537
2112
3095
6760
77
62
31
160
1096
2910
2943
12
5162
50
364
4921
1690
50639

2002

4389
21
596
1024
948
366
6008
2122
244
364
984
3636
2315
3173
7414
90
67
34
177
1215
3103
3197
13
5658
57
406
5171
1690
54482

2003 (R)

5002
21
657
1121
1076
397
6508
2279
269
399
1101
3738
2552
3459
8134
97
73
37
162
1359
3308
3487
15
8005
66
457
5928
2366
62073

2004(P)

5720
21
727
751
1216
436
7087
2548
289
439
1217
3977
2792
3804
8969
106
73
42
172
1525
3529
3834
17
8575
76
516
6460
2548
67466

2005

2006

Gr. Rate

6458
22
815
1352
1375
482
7817
2854
301
478
1357
5436
3122
4188
9936
114
92
47
172
1715
3876
4261
20
9257
73
573
7344
2681
76218

7218
22
914
1432
1541
529
8622
3087
334
524
1505
6220
3559
4609
10966
124
104
52
184
1932
4035
4754
22
10054
106
643
7989
2872
83953

11.50
0.54
11.34
-1.38
12.66
8.69
9.03
11.89
11.10
12.10
10.79
9.19
11.82
5.36
10.20
8.39
8.82
13.21
5.14
11.61
8.35
9.80
10.27
14.71
11.48
12.11
9.88
9.30
10.67

UTs
A & N Islands
16
*
16
*
23
25
28
28
+
28
+
37
41
11.97
Chandigarh
386
386
**
386
**
386
**
386
**
562
586
617
647
8.12
D & N Haveli
13
*
13
*
13
*
13
*
13
*
31
35
40
45
20.50
Daman & Diu
27
30
34
37
41
44
48
51
55
9.24
Delhi
3033
3277
3424
3635
3699
3971
4237
4187
4487
4.81
Lakshadweep
3
3
4
4
5
5
5
5
6
8.64
Puducherry
119
206
231
252
270
293
313
347
384
12.39
TOTAL UTs
3597
3931
4115
4352
4442
4934
5252
5283
5665
5.68
GRAND TOTAL
41367
44875
48857
54991
58924
67007
72718
81502
89618
10.29
Notes: *: Data relates to 1996-97; **: Data relates to 1997-98; : Data relates to 2002-03; +: Data relates to 2001-02; $: Data relates to 1999-00; #: Figures for Bihar only,
excluding Jharkhand; (P): Provisional; R: Revised. Consequent to the formation of three States (Chattisgarh, Jharkhand and Uttarakhand), separate data is available only from 2000-01

Source: Government of India (2009), Road Transport Year Book, 2006-07, Ministry of Shipping, Road Transport & Highways, New Delhi.

Table 1.3: Total Registered Motor Vehicles (Category-wise) in the States/ UTs of India (as on 31st March, 2006 - Provisional)
STATES/ UTs
Multiaxled/Articulated
Vehicles/
Trucks & Lorries

Light
Motor
Vehicles
(Goods)

TRANSPORT
Buses
Taxis

Light Motor
Vehicles
(Passengers)

Total
Transport

Two
Wheelers

Cars

NON-TRANSPORT
Omni
Tractors
Buses

Jeeps

Trailers

Others

Total
Non- Tpt.

Total Number of
Vehicles

Andhra Pradesh

181832
(2.52)

85112
(1.18)

18368
(0.25)

113693
(1.58)

299776
(4.15)

698781
(9.68)

5707383
(79.07)

576329
(7.98)

65377
(0.91)

45214
(0.63)

66613
(0.92)

51881
(0.72)

6617
(0.09)

6519414
(90.32)

7218195

Arunachal Pradesh*

2355
(10.66)

601
(2.72)

682
(3.09)

343
(1.55)

1449
(6.56)

5430
(24.57)

11112
(50.28)

2595
(11.74)

2284
(10.33)

0
(0.00)

345
(1.56)

155
(0.70)

180
(0.81)

16671
(75.43)

22101

Assam

91801
(10.04)

19371
(2.12)

11378
(1.24)

12671
(1.39)

34906
(3.82)

170127
(18.61)

541275
(59.22)

145029
(15.87)

15080
(1.65)

0
(0.00)

11270
(1.23)

9050
(0.99)

22192
(2.43)

743896
(81.39)

914023

Bihar

50016
(3.49)

0
(0.00)

16271
(1.14)

22698
(1.58)

45365
(3.17)

134350
(9.38)

964594
(67.34)

76896
(5.37)

41863
(2.92)

0
(0.00)

130477
(9.11)

75594
(5.28)

8569
(0.60)

1297993
(90.62)

1432343

Chhattisgarh

51716
(3.36)

21858
(1.42)

24955
(1.62)

5036
(0.33)

9194
(0.60)

112759
(7.32)

1247658
(80.97)

59591
(3.87)

8575
(0.56)

0
(0.00)

58733
(3.81)

50684
(3.29)

2849
(0.18)

1428090
(92.68)

1540849

34043
(6.44)

5689
(1.08)

9361
(1.77)

10035
(1.90)

59128
(11.18)

375571
(70.99)

89547
(16.93)

0
(0.00)

0
(0.00)

0
(0.00)

4773
(0.90)

469891
(88.82)

529019

Gujarat

204362
(2.37)

253340
(2.94)

54446
(0.63)

47914
(0.56)

336695
(3.90)

896757
(10.40)

6352109
(73.67)

703968
(8.16)

122864
(1.42)

0
(0.00)

311385
(3.61)

217790
(2.53)

17417
(0.20)

7725533
(89.60)

8622290

Haryana

176046
(5.70)

74494
(2.41)

19986
(0.65)

16344
(0.53)

45858
(1.49)

332728
(10.78)

1881174
(60.94)

373659
(12.10)

95450
(3.09)

0
(0.00)

382581
(12.39)

0
(0.00)

21434
(0.69)

2754298
(89.22)

3087026

Himachal Pradesh

31803
(9.54)

20623
(6.18)

6859
(2.06)

14542
(4.36)

2825
(0.85)

76652
(22.98)

187883
(56.33)

58005
(17.39)

9544
(2.86)

402
(0.12)

0
(0.00)

0
(0.00)

1042
(0.31)

256876
(77.02)

333528

Jammu & Kashmir

33174
(6.34)

16843
(3.22)

21435
(4.09)

13656
(2.61)

15919
(3.04)

101027
(19.30)

297656
(56.85)

98309
(18.78)

11058
(2.11)

219
(0.04)

12818
(2.45)

587
(0.11)

1869
(0.36)

422516
(80.70)

523543

Jharkhand

68915
(4.58)

10238
(0.68)

24693
(1.64)

46834
(3.11)

150680
(10.01)

1164854
(77.40)

113500
(7.54)

30962
(2.06)

0
(0.00)

20968
(1.39)

16819
(1.12)

7268
(0.48)

1354371
(89.99)

1505051

Karnataka

210432
(3.38)

65581
(1.05)

40819
(0.66)

67385
(1.08)

213721
(3.44)

597938
(9.61)

4512910
(72.55)

635205
(10.21)

41989
(0.68)

54808
(0.88)

166685
(2.68)

167622
(2.69)

43213
(0.69)

5622432
(90.39)

6220370

Kerala

264262
(7.43)

127574
(3.58)

119753
(3.37)

342527
(9.63)

854116
(24.00)

2099652
(59.00)

498472
(14.01)

73158
(2.06)

0
(0.00)

15162
(0.43)

2264
(0.06)

15880
(0.45)

2704588
(76.00)

3558704

83293
(1.81)

39943
(0.87)

27997
(0.61)

72760
(1.58)

51049
(1.11)

275042
(5.97)

3526416
(76.52)

185700
(4.03)

38291
(0.83)

0
(0.00)

376771
(8.18)

192742
(4.18)

13665
(0.30)

4333585
(94.03)

4608627

287230
(2.62)
6746
(5.43)

334741
(3.05)
1854
(1.49)

66754
(0.61)
2570
(2.07)

122389
(1.12)
377
(0.30)

534535
(4.87)
2721
(2.19)

1345649
(12.27)
14268
(11.49)

7691856
(70.14)
86931
(70.03)

1165365
(10.63)
11233
(9.05)

300023
(2.74)
8568
(6.90)

0
(0.00)
801
(0.65)

229362
(2.09)
1446
(1.16)

204733
(1.87)
612
(0.49)

29446
(0.27)
270
(0.22)

9620785
(87.73)
109861
(88.51)

10966434

17060
(16.39)
4475
(8.63)

2565
(2.46)
5
(0.01)

3497
(3.36)
704
(1.36)

8432
(8.10)
4988
(9.62)

3569
(3.43)
1534
(2.96)

35123
(33.73)
11706
(22.57)

31008
(29.78)
24737
(47.68)

22351
(21.47)
6286
(12.12)

11300
(10.85)
3712
(7.16)

0
(0.00)
0
(0.00)

487
(0.47)
246
(0.47)

2607
(2.50)
264
(0.51)

1240
(1.19)
4925
(9.49)

68993
(66.27)
40170
(77.43)

104116

Goa(c )

Madhya Pradesh
Maharashtra
Manipur
Meghalaya
Mizoram

124129

51876

Nagaland
Orissa
Punjab
Rajasthan
Sikkim
Tamil Nadu

47089
(25.63)
74432
(3.85)
68154
(1.69)

11804
(6.43)
47843
(2.48)
59566
(1.48)

4060
(2.21)
15996
(0.83)
21136
(0.52)

5004
(2.72)
30426
(1.57)
9937
(0.25)

9548
(5.20)
34360
(1.78)
43280
(1.07)

77505
(42.19)
203057
(10.51)
202073
(5.01)

42851
(23.32)
1530295
(79.21)
2975198
(73.73)

37513
(20.42)
82686
(4.28)
335284
(8.31)

22481
(12.24)
30547
(1.58)
41670
(1.03)

350
(0.19)
2567
(0.13)
0
(0.00)

1891
(1.03)
42189
(2.18)
472873
(11.72)

772
(0.42)
34679
(1.79)
481
(0.01)

353
(0.19)
5975
(0.31)
7581
(0.19)

106211
(57.81)
1728938
(89.49)
3833087
(94.99)

183716

206381
(4.34)

22966
(0.48)

60979
(1.28)

42679
(0.90)

79576
(1.67)

412581
(8.68)

3393916
(71.39)

269861
(5.68)

147840
(3.11)

0
(0.00)

464443
(9.77)

59564
(1.25)

5822
(0.12)

4341446
(91.32)

4754027

1915
(8.70)

489
(2.22)

365
(1.66)

6052
(27.49)

0
(0.00)

8821
(40.06)

5282
(23.99)

3053
(13.87)

3769
(17.12)

1070
(4.86)

24
(0.11)

0
(0.00)

0
(0.00)

13198
(59.94)

22019

1931995
4035160

315564
(3.14)

231491
(2.30)

89991
(0.90)

134580
(1.34)

174646
(1.74)

946272
(9.41)

7936778
(78.94)

840433
(8.36)

55673
(0.55)

19957
(0.20)

102744
(1.02)

44015
(0.44)

108041
(1.07)

9107641
(90.59)

10053913

Tripura

8138
(7.69)

2535
(2.40)

1961
(1.85)

1316
(1.24)

13237
(12.52)

27187
(25.70)

61968
(58.59)

6656
(6.29)

4358
(4.12)

13
(0.01)

89
(0.08)

100
(0.09)

5397
(5.10)

78581
(74.30)

105768

Uttarakhand

12092
(1.88)

8336
(1.30)

5949
(0.92)

16069
(2.50)

7906
(1.23)

50352
(7.83)

486734
(75.65)

59368
(9.23)

6944
(1.08)

1629
(0.25)

34155
(5.31)

1401
(0.22)

2802
(0.44)

593033
(92.17)

643385

Uttar Pradesh

106760
(1.34)
235269
(8.19)

77668
(0.97)
$

26549
(0.33)
43599
(1.52)

28443
(0.36)
68926
(2.40)

91346
(1.14)
40315
(1.40)

330766
(4.14)
388109
(13.51)

6083655
(76.15)
1833820
(63.86)

615739
(7.71)
556230
(19.37)

112837
(1.41)
@

19015
(0.24)
0
(0.00)

791411
(9.91)
58828
(2.05)

14579
(0.18)
#

21132
(0.26)
34812
1.21

7658368
(95.86)
2483690
86.49

7989134

2875355
(3.42)

1399629
(1.67)

730807
(0.87)

1020467
(1.22)

2492726
(2.97)

8518984
(10.15)

61055276
(72.73)

7628863
(9.09)

1306217
(1.56)

146045
(0.17)

3753996
(4.47)

1148995
(1.37)

394764
(0.47)

75434156
(89.85)

83953140

1716
(4.20)

76
(0.19)

658
(1.61)

246
(0.60)

2997
(7.34)

5693
(13.95)

23079
(56.55)

2441
(5.98)

779
(1.91)

335
(0.82)

229
(0.56)

22
(0.05)

8237
(20.18)

35122
(86.05)

40815

1766
(0.27)
6072
(13.60)

8039
(1.24)
1750
(3.92)

2307
(0.36)
176
(0.39)

1771
(0.27)
123
(0.28)

2000
(0.31)
539
(1.21)

15883
(2.46)
8660
(19.39)

454308
(70.26)
23607
(52.86)

176387
(27.28)
11820
(26.47)

0
(0.00)
460
(1.03)

51
(0.01)
6
(0.01)

0
(0.00)
57
(0.13)

0
(0.00)
46
(0.10)

0
(0.00)
0
(0.00)

630746
(97.54)
35996
(80.61)

646629

Daman & Diu

2223
(4.03)

2316
(4.20)

420
(0.76)

43
(0.08)

976
(1.77)

5978
(10.85)

33379
(60.58)

15007
(27.23)

307
(0.56)

38
(0.07)

224
(0.41)

138
(0.25)

31
(0.06)

49124
(89.15)

55102

Delhi

57682
(1.29)
0
(0.00)
6965
(1.81)

67144
(1.50)
347
(5.54)
4903
(1.28)

25963
(0.58)
13
(0.21)
1997
(0.52)

15569
(0.35)
0
(0.00)
1626
(0.42)

96149
(2.14)
273
(4.36)
4665
(1.21)

262507
(5.85)
633
(10.11)
20156
(5.25)

2851920
(63.55)
4822
(76.99)
296735
(77.22)

1222706
(27.25)
38
(0.61)
52593
(13.69)

65028
(1.45)
88
(1.41)
3865
(1.01)

80277
(1.79)
73
(1.17)
2918
(0.76)

4706
(0.10)
63
(1.01)
478
(0.12)

99
(0.00)
0
(0.00)
1655
(0.43)

169
(0.00)
546
(8.72)
5850
(1.52)

4224905
(94.15)
5630
(89.89)
364094
(94.75)

4487412

76424
(1.35)

84575
(1.49)

31534
(0.56)

19378
(0.34)

107599
(1.90)

319510
(5.64)

3687850
(65.10)

1480992
(26.14)

70527
(1.24)

83698
(1.48)

5757
(0.10)

1960
(0.03)

14833
(0.26)

5345617
(94.36)

5665127

2951779
(3.29)

1484204
(1.66)

762341
(0.85)

1039845
(1.16)

2600325
(2.90)

8838494
(9.86)

64743126
(72.24)

9109855
(10.17)

1376744
(1.54)

229743
(0.26)

3759753
(4.20)

1150955
(1.28)

409597
(0.46)

80779773
(90.14)

89618267

West Bengal
TOTAL STATES (P)
A & N Islands
Chandigarh
D & N Haveli

Lakshadweep
Puducherry
TOTAL UTs (P)
GRAND TOTAL (P)

2871799

44656

6263
384250

Notes: *:Totals have been arrived at by adding data of 1996-97 to the data on newly registered vehicles; $: Included in Multi-axled/Articulated Vehicles/Trucks & Lorries; (c): LMV (passengers) also includes 6538 Motorcycles on hire
; (P):= Provisional; :Includes Omni Buses. Figures in parentheses indicate the share of the particular category of motor vehicles in the total registered motor vehicles in each respective State.
Source: Government of India (2009), Road Transport Year Book, 2006-07, Ministry of Shipping, Road Transport & Highways, New Delhi.

Given the increasing trend in the number of vehicles in India, as in other

countries, the Central as well as the State Governments in India are finding it difficult
to maintain their road system and also provide for road expansion.
The Policy Issues
The transport system in India has serious deficiencies. Road transport services,
in particular, are highly inefficient. Excessive time and too much money is spent on
moving people and goods. The economic losses from congestion and poor roads are
estimated to be as high as Rs 120 to 300 billion a year4. Inefficient and unreliable
transport and logistics systems have made Indias exports less competitive. In fact, the
inefficiencies of the transport sector have become a hindrance to business. In addition,
it causes a range of negative social and environmental consequences such as social
isolation, road accidents and motor vehicle emissions for the low income groups, both
in rural and urban areas.
In recent years numerous policy initiatives have been taken by the
Government to improve the transport system in the country. First, National Highway
Authority has become functional to act as an infrastructure procurer rather than a
provider. Second, private participation has been allowed in the construction of
highways. Third, a Road Fund has been created by introducing a one rupee a litre cess
on diesel and petrol. The revenue from this cess is used for the development and
maintenance of national, states, and rural roads.
These reforms represent an important paradigm shift- from treating transport
as a social service to an economic sector. However, much more has to be done for the
reform of the transport sector to facilitate faster economic growth.
Objectives and Scope of the Study
Given the status of roads and road transport system in India, the increase in the
number of registered vehicles causes congestion and stress on the available meagre
infrastructure of highways and other motorable routes. Also, given that the taxes on
road use levied by different States is uneven and levied mainly for mobilizing
resources with no regard for its economic effects, this study aims at:

Analysing fiscal importance of taxes on motor vehicles.

Evaluating the structure of all transport taxes levied by the Central,
State and local governments
o on purchase and use of vehicles in terms of
cost for users, especially for trade and industry to have
least cost and efficiency in national and international
trade and commerce;
Presenting an estimation of combined incidence of all the taxes on road
transport for a few select categories of vehicles; and
Recommending a rational system of taxation for the transport industry
and putting forth reforms for

Government of India (1996), The India Infrastructure Report: Policy Improvement for Growth and
Welfare (Rakesh Mohan Committee), New Delhi.

o rational and efficient user charges and

o modalities of governance of taxes
to achieve overall higher growth in the road transport sector and
thereby facilitate growth in trade and industry in the country.
The study hypothesizes that the road user taxes should mainly be an
instrument to regulate and control the vehicles; these are not necessarily meant for
only mobilizing resources. However, with the rational and regularized growth of
vehicles, the revenue will automatically grow in all the States.
Also, it hypothesizes that the combined incidence of all taxes on road
transport, levied by the different tiers of governments on different facets of owning a
vehicle, is substantial. These taxes affect the (i) purchase of vehicles, (ii) ownership of
vehicles, and (iii) the operation of vehicles. This excessive burden of all types of
taxes on vehicles hinders the growth of different types of vehicles in the country. In
addition, the taxes on the road transport sector lead to a cascading effect due to the tax
levied at earlier stages. The study, therefore, attempts to estimate total burden of taxes
on different types of vehicles.
The study also tests the hypothesis that the governance of these taxes,
presently based on a large number of check-posts for passengers and goods tax,
interferes with the free flow of trade and traffic within a State and causes harassment
to a large body of dealers. Also, it examines the procedures of assessment and
collection, and recommends policy imperatives to have reforms in the structure and
governance of motor vehicles tax and the other taxes on goods and passenger
vehicles.
Structure of the Report
The scheme of presentation of the Report is as follows: Chapter 2 presents an
analysis of the fiscal importance of road user taxes in India, levied by both the Centre
and the States. Chapter 3 delves into the theory of road pricing. It presents a review of
literature related to road pricing. Chapter 4 presents a detailed analysis of the rate
structure of all the taxes related to road users levied by the Centre, States or local
bodies and encompasses all the taxes pertaining to purchase of vehicles, ownership of
vehicles, and operations of the vehicles. These include central excise (cenVAT), state
VAT, motor vehicle tax, passengers and goods tax, entry tax, and toll tax. The
analysis also includes fee for license, and permit for intra-state as well as interstate
movement of vehicles. Chapter 5 deals with the issues related to toll taxes and their
management for highways. The environmental issues in the production and use of
motor vehicles and consequent recommendations to have eco-taxes are given in
Chapter 6. Chapters 7 and 8 present areas of reforms in the structure and governance,
respectively. Management Information System for the governance of road user taxes
is presented in Chapter 9. This chapter also gives recommendations for a scientific
MIS for the taxes. Finally, the executive summary of the study is given at the
beginning of the Report.

2
Fiscal Significance of
Road User Taxes
Various taxes on vehicles levied by the different tiers of
Government have raised increasing resources for the States 1 . Revenue
from taxation of motor vehicles is one of the key sources of revenue for
States. This tax was initially levied as a regulatory tax but over the years it
has emerged as an important source of revenue for the Government. In this
context, this chapter focuses on the trends in revenue from motor vehicles
tax (MVT), and passengers and goods tax (P&GT). This study makes use
of revenue data from various sources, viz. State Finances Documents
(RBI), State Budget Documents, Central Statistical Organization etc. The
period undertaken for the analysis at the all States level is 1980-81 to
2007-08, while for the State-wise analysis it is 1993-94 to 2007-08.
Revenue of Motor Vehicle Tax
Revenue from MVT for all States in the fifties and the sixties was
inconsequential. However, during recent years, the revenue from MVT
has increased considerably from Rs. 415 crore in 1980-81 to Rs. 1,566
crore in 1990-91, and further to Rs. 6,666 crore in 2000-01. By the year
2006-07, the yield increased to a whopping Rs. 13,238 crore, which
further increased to Rs. 15,143 crore in 2007-08 (Table 2.1). The revenue
from the MVT has increased at an annual growth rate of 14.6 percent and
exhibited a buoyancy value of 1.05 during the period 1980-81 to 2007-08.
1

The taxes levied by the Central Act also are assigned to the States. Hence, the revenue
from motor vehicle taxes accrue to the States under the regulations of the Central Act.

Table 2.1: Revenue significance of Taxes on Vehicles: All States

MVT
1980-81

PGT

Total tax on vehicles

(Rs. Crore)
Own Tax Revenue
6,616

415
272
687
(6.27)
(4.11)
(10.38)
1981-82
454
313
767
8,234
(5.51)
(3.80)
(9.32)
1982-83
531
452
983
9,486
(5.60)
(4.76)
(10.36)
1983-84
623
460
1,083
10,753
(5.79)
(4.28)
(10.07)
1984-85
700
493
1,193
12,260
(5.71)
(4.02)
(9.73)
1985-86
826
552
1,378
14,551
(5.68)
(3.79)
(9.47)
1986-87
998
602
1,600
16,712
(5.97)
(3.60)
(9.57)
1987-88
1,175
715
1,890
19,322
(6.08)
(3.70)
(9.78)
1988-89
1,290
869
2,159
22,401
(5.76)
(3.88)
(9.64)
1989-90
1,415
905
2,320
25,995
(5.44)
(3.48)
(8.92)
1990-91
1,566
1,062
2,628
30,345
(5.16)
(3.50)
(8.66)
1991-92
1,837
1,136
2,973
35,756
(5.14)
(3.18)
(8.31)
1992-93
2,194
1,278
3,473
39,868
(5.50)
(3.21)
(8.71)
1993-94
2,583
1,480
4,062
46,424
(5.56)
(3.19)
(8.75)
1994-95
3,081
1,483
4,565
55,735
(5.53)
(2.66)
(8.19)
1995-96
3,726
1,508
5,234
63,865
(5.83)
(2.36)
(8.20)
1996-97
4,117
1,663
5,780
71,102
(5.79)
(2.34)
(8.13)
1997-98
4,854
2,004
6,858
81,229
(5.98)
(2.47)
(8.44)
1998-99
5,024
1,979
7,003
88,995
(5.65)
(2.22)
(7.87)
1999-00
6,153
2,099
8,252
102,582
(6.00)
(2.05)
(8.04)
2000-01
6,666
2,075
8,740
117,981
(5.65)
(1.76)
(7.41)
2001-02
7,644
3,671
11,316
128,097
(5.97)
(2.87)
(8.83)
2002-03
8,441
3,569
12,010
142,143
(5.94)
(2.51)
(8.45)
2003-04
10,138
4,190
14,328
159,921
(6.34)
(2.62)
(8.96)
2004-05
10,811
5,206
16,017
189,133
(5.72)
(2.75)
(8.47)
2005-06
11,964
6,450
18,414
212,307
(5.64)
(3.04)
(8.67)
2006-07
13,238
6,808
20,047
252,548
(5.24)
(2.70)
(7.94)
2007-08
15,143
6,808
21,951
286,546
(5.28)
(2.38)
(7.66)
Gr. Rate*
14.6
12.0
13.7
14.7
Gr. Rate**
13.0
13.6
13.2
13.3
Buoyancy#
1.05
0.86
0.98
1.05
Buoyancy
1.06
1.09
1.07
1.08
Note: The figures in parentheses indicate receipts from a particular tax as a percent of States Own Tax Revenue.
*Growth Rate is calculated for the period 1980-81 to 2007-08
**Growth Rate is calculated for the period 1993-94 to 2007-08
# Buoyancy is calculated for the period 1980-81 to 2007-08
Buoyancy is calculated for the period 1993-94 to 2007-08
Source: Various issues of State Finances, RBI.

10

However, its share in the States Own Tax Revenue (SOTR) has remained
less than 6 percent over the years, except for a few years (Table 2.1).
Revenue growth has fallen in the year 1998-99 in relation to the
preceding year in the States of Assam, Bihar, Goa, Karnataka, and
Maharashtra. Among the States, the highest yield from this tax in 2007-08
was in the State of Maharashtra (Rs. 214,311 lakh), followed by Andhra
Pradesh (Rs. 160,380 lakh) and Tamil Nadu (Rs. 148,321 lakh). The yield
from this tax has been rising throughout 1993-94 to 2007-08 in a majority
of the States. The new States formed in the year 2001-02, such as the
Chhattisgarh and Uttaranchal, recorded quite a high revenue from motor
vehicles tax, which rose at a steady rate of 13.49 percent and 15.98
percent, respectively, from 2001-02 to 2007-08 (Table 2.2). In the State of
Karnataka, there has been a spurt in revenue from this tax in 1995-96
when a major category of taxpayers was shifted from annual to lifetime
taxation 2 . The system of lifetime taxation was initiated in Karnataka in
1986. Starting with two-wheelers, it now applies to other categories of
vehicles too like tractor-trailers, motor cars and jeeps etc. Thus, the
revenue from motor vehicles tax has shot up from Rs. 29,098 lakh in
1994-95 to Rs. 45,603 lakh in 1995-96 (Table 2.2).
The growth rate of revenue from the motor vehicles tax in a
majority of non-special category States was within the range of 10 to 17
percent; Goa exhibited the highest growth rate of 16.88 percent followed
by Gujarat (15.22 percent) and West Bengal (15.13 percent). In the
bifurcated States of Bihar, Madhya Pradesh and Uttar Pradesh, the growth
rate of revenue from motor vehicles tax, during the period 2001-02 to
2007-08, stood at 8.86 percent, 10.22 percent and 14.61 percent,
respectively. In the newly formed States of Chhattisgarh, Jharkhand and
Uttaranchal, the growth rate (during 2001-02 to 2007-08) turned out to be
13.49 percent, 11.98 percent and 15.98 percent, respectively. The revenue
from tax on motor vehicles in the special category States recorded growth
rates as high as 25.17 percent in Tripura, 20.61 percent in Himachal
Pradesh and 18.03 percent in Mizoram during the period 1993-94 to 200708 (Table 2.2).

Government of Karnataka. 2001 b First Report of the Tax Reforms Commission, pp.
225, Department of Finance, Government of Karnataka.

11

Table 2.2: Trends in Motor Vehicles Tax in different States

States
Andhra Pradesh
Arunachal Pradesh
Assam
Bihar

1993-94
30,048.6
(7.84)
66.4
(18.29)
2,921.5
(4.77)
10,265.8
(5.87)

1994-95
35,520.9
(8.40)
81.1
(14.49)
3,788.0
(5.99)
15,382.6
(8.38)

1995-96
46,142.8
(11.20)
99.1
(12.92)
3,998.5
(5.69)
15,779.6
(8.00)

1996-97
55,383.0
(11.34)
108.9
(12.77)
5,198.1
(6.78)
16,083.5
(7.15)

1997-98
63,660.0
(8.95)
97.2
(9.89)
4,326.2
(4.91)
17,407.5
(7.28)

1998-99
69,448.2
(8.72)
101.5
(8.99)
4,083.3
(4.16)
16,495.6
(6.17)

1999-00
73,359.7
(8.14)
111.7
(8.05)
6,869.3
(5.61)
17,847.1
(4.91)

2000-01
83,396.8
(7.90)
112.1
(5.42)
7,377.1
(5.22)
22,397.4
(7.63)

Chhattisgarh
Goa
Gujarat
Haryana
Himachal Pradesh
Jammu & Kashmir

853.5
(4.55)
17,469.3
(4.43)
5,216.4
(3.28)
1,156.1
(4.52)
676.3
(3.01)

1,040.1
(4.60)
20,816.7
(4.39)
4,558.0
(2.41)
1,117.0
(3.73)
889.6
(3.65)

1,253.2
(4.61)
30,568.8
(5.74)
5,282.2
(2.44)
1,231.5
(3.61)
1,222.3
(4.29)

1,502.7
(4.96)
33,394.2
(5.51)
6,158.9
(2.87)
1,446.5
(3.51)
1,165.0
(4.03)

3,122.6
(8.55)
39,598.9
(6.01)
6,711.3
(2.83)
1,582.7
(3.32)
1,478.7
(4.02)

2,445.3
(6.85)
46,021.3
(6.04)
7,137.3
(2.29)
1,747.7
(3.06)
1,813.8
(4.15)

2,832.0
(6.18)
60,170.7
(7.37)
8,477.4
(2.41)
2,836.9
(4.57)
2,190.9
(3.79)

2,992.0
(5.81)
62,727.8
(6.93)
8,568.8
(1.99)
6,104.1
(8.38)
2,332.2
(3.12)

Jharkhand
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Manipur
Meghalaya

25,978.1
(6.81)
15,106.0
(6.44)
21,008.1
(7.85)
27,047.7
(3.51)
129.5
(6.99)
251.6
(5.25)

29,098.8
(6.78)
18,390.2
(6.57)
23,172.5
(8.07)
34,452.3
(3.64)
252.3
(10.60)
245.3
(4.36)

45,603.2
(8.65)
22,286.7
(6.59)
30,870.7
(8.77)
42,319.2
(3.87)
134.0
(4.80)
314.0
(4.74)

32,575.0
(5.65)
24,759.0
(6.35)
33,815.9
(8.24)
61,374.2
(5.24)
134.3
(9.46)
295.3
(3.82)

44,430.7
(6.93)
30,163.3
(6.70)
37,138.0
(8.14)
75,207.3
(5.48)
137.7
(3.86)
295.9
(4.02)

38,679.4
(5.57)
32,330.7
(6.95)
38,225.2
(7.48)
63,695.2
(4.48)
110.9
(3.61)
289.6
(3.28)

44,881.7
(5.80)
38,083.0
(7.33)
40,200.9
(6.94)
70,830.3
(4.10)
233.3
(5.84)
379.2
(3.68)

50,182.2
(5.55)
39,485.0
(6.73)
40,589.3
(7.20)
78,584.1
(3.98)
280.1
(5.71)
466.3
(3.93)

2001-02
93,918.0
(7.48)
160.5
(4.70)
9,359.3
(5.98)
14,153.5
(5.79)
12,488.1
(6.27)
3,283.5
(5.77)
67,663.0
(7.32)
10,362.3
(2.08)
13,270.0
(14.49)
2,817.6
(3.29)
8,610.2
(4.15)
71,236.8
(7.23)
45,218.0
(7.63)
39,332.7
(8.36)
94,778.7
(4.45)
277.4
(5.34)
472.1
(3.47)

2002-03
92,946.9
(7.37)
174.9
(4.79)
11,628.0
(6.01)
17,798.4
(6.44)
15,781.1
(6.78)
3,678.3
(6.11)
80,811.0
(8.49)
11,439.2
(2.06)
8,197.8
(9.24)
3,366.1
(3.45)
10,491.1
(4.61)
67,570.0
(6.47)
51,320.1
(7.03)
42,863.8
(6.95)
94,123.0
(4.13)
343.6
(5.27)
461.7
(3.19)

2003-04
106,776.0
(7.73)
202.4
(4.69)
12,399.3
(5.99)
20,950.4
(6.23)
16,706.6
(6.45)
5,076.4
(7.15)
93,639.4
(8.38)
13,239.2
(2.09)
7,837.4
(7.96)
3,843.4
(3.34)
9,866.0
(4.33)
80,006.3
(6.36)
58,577.5
(7.24)
45,491.8
(6.70)
120,596.8
(4.79)
337.8
(4.88)
551.9
(3.11)

2004-05
116,863.8
(7.19)
220.6
(4.46)
13,471.7
(4.97)
21,278.4
(6.37)
19,179.9
(5.94)
5,878.2
(6.86)
106,092.5
(8.19)
14,041.1
(1.89)
10,782.4
(8.61)
4,167.6
(2.98)
13,023.9
(5.42)
98,299.0
(6.12)
61,047.5
(6.81)
48,865.4
(6.29)
117,714.5
(3.85)
334.6
(4.12)
745.3
(3.59)

2005-06
135,573.8
(7.06)
298.9
(4.84)
15591.5
(4.82)
30,244.1
(8.49)
20,596.6
(5.08)
6,384.4
(5.82)
115,397.4
(7.35)
17,212.5
(1.90)
10,150.7
(6.78)
4,916.8
(2.91)
13,831.5
(4.79)
110,544.9
(5.93)
62,850.5
(6.43)
55,602.1
(6.10)
130,910.6
(3.90)
334.1
(3.52)
873.3
(3.46)

2006-07
136,473.6
(5.70)
293.1
(3.75)
15,114.7
(4.34)
18,137.7
(4.50)
25,305.3
(5.02)
7,456.3
(5.77)
119,115.2
6.45
22,366.1
(2.05)
10,634.6
(6.42)
6,396.4
(3.36)
21,827.0
(6.98)
137,449.7
(5.90)
70,774.4
(5.93)
63,429.7
(6.06)
184,106.2
(4.59)
319.2
(2.63)
934.3
(3.07)

2007-08
160,379.9
(5.57)
642.0
(6.55)
13,861.9
(4.13)
27,320.7
(5.37)
27,693.9
(4.93)
8,196.1
(6.03)
131,009.1
(5.99)
23,379.1
(2.01)
11,372.0
(5.81)
7,260.4
(3.16)
13,566.5
(3.82)
83,733.5
(3.22)
85,317.2
(6.24)
70,262.1
(5.85)
214,310.5
(4.51)
357.1
(2.42)
1,134.9
(3.56)

12

GR
11.5

(Rs. lakh)
Buoyancy
1.0

13.6

1.2

13.5

1.4

8.9

0.7

13.5

0.8

16.9

1.2

15.2

1.2

12.3

0.9

20.6

1.6

17.4

1.5

12.0

1.0

11.2

0.9

12.1

1.0

10.2

1.1

13.4

1.3

8.1

0.8

11.5

1.0

Mizoram
Nagaland
Orissa
Punjab
Rajasthan
Sikkim
Tamil Nadu
Tripura
Uttar Pradesh

56.2
(12.09)
270.0
(14.79)
8,643.6
(10.05)
14,127.9
(6.57)
18,063.1
(9.26)
52.1
(3.64)
31,369.7
(6.53)
126.0
(3.40)
9,849.4
(2.38)

62.7
(13.70)
231.6
(12.00)
9,512.1
(10.31)
17,805.0
(6.85)
23,219.7
(10.06)
62.1
(4.52)
37,244.6
(6.38)
155.5
(3.58)
10,805.8
(2.22)

78.9
(13.65)
291.6
(14.02)
10,750.4
(9.54)
19,065.1
(7.19)
24,650.7
(9.03)
125.1
(6.04)
39,220.7
(5.48)
136.2
(2.84)
12,545.8
(2.29)

92.5
(13.87)
387.9
(12.37)
12,825.2
(9.56)
19,522.1
(7.14)
27,694.4
(8.87)
121.7
(5.61)
42,542.4
(5.33)
139.8
(2.31)
13,953.6
(2.21)

133.3
(16.93)
386.2
(11.53)
14,178.0
(9.97)
21,568.1
(7.08)
34,720.0
(9.62)
154.4
(5.63)
46,968.5
(5.41)
182.5
(2.55)
16,660.1
(2.38)

153.0
(16.63)
437.0
(12.37)
14,318.1
(9.63)
26,671.9
(8.18)
36,435.7
(9.25)
151.4
(5.32)
51,814.3
(5.38)
350.5
(4.17)
21,130.0
(2.67)

183.5
(17.10)
458.8
(10.63)
15,552.9
(9.13)
32,136.8
(8.14)
45,547.8
(10.05)
169.0
(5.41)
57,798.1
(5.29)
359.6
(3.53)
51,210.2
(5.45)

201.8
(13.99)
528.6
(9.40)
17,817.2
(8.16)
33,831.6
(6.91)
51,130.4
(9.65)
154.4
(2.35)
59,043.8
(4.81)
425.8
(3.39)
54,308.4
(4.95)

Uttaranchal
West Bengal
All States*

8,869.3
(3.04)
258,253
(5.56)

11,342.1
(3.04)
308,144
(5.53)

11,913.1
(2.88)
372,633
(5.83)

13,426.7
(3.15)
411,734
(5.79)

14,791.7
(3.27)
485,387
(5.98)

15,806.6
(3.31)
502,400
(5.65)

18,556.2
(3.64)
615,313
(6.00)

28,252.7
(4.77)
666,555
(5.65)

209.9
(10.98)
534.8
(10.20)
21,636.8
(8.77)
31,844.3
(6.61)
56,632.5
(9.99)
196.7
(2.45)
64,843.2
(4.98)
527.8
(3.33)
50,303.7
(4.87)
6,740.6
(7.53)
20,865.2
(3.21)
764,437
(5.97)

256.1
(9.16)
474.3
(7.66)
2,573.47
(8.96)
44,387.6
(7.77)
64,613.9
(10.33)
234.7
(2.22)
74,562.0
(5.20)
528.7
(2.89)
61,884.2
(4.85)
7,167.9
(7.02)
24,939.9
(3.54)
844,102
(5.94)

338.2
(9.99)
599.5
(8.75)
28,002.9
(8.48)
38,879.4
(6.33)
90,430.7
(12.48)
273.9
(2.54)
93,429.2
(5.86)
801.4
(3.62)
67,696.0
(4.98)
8,612.1
(7.02)
53,536.6
(6.11)
1,013,816
(6.34)

379.8
(9.60)
729.9
(9.32)
33,810.6
(8.10)
40,393.2
(5.82)
81,720.7
(9.71)
324.3
(2.77)
101,474.8
(5.24)
1,045.5
(4.36)
77,583.9
(4.94)
9,890.8
(6.85)
52,766.5
(5.32)
1,081,091
(5.72)

435.0
(7.90)
871.4
(8.26)
40,585.5
(8.11)
43,119.2
(4.80)
90,818.2
(9.19)
424.4
(2.88)
112,493.2
(4.82)
1,742.9
(5.89)
96,520.4
(5.12)
11,484.6
(6.44)
53,756.4
(5.17)
1,196,410
(5.64)

501.5
(7.42)
1,226.0
(10.30)
42,653.6
(7.03)
46,804.8
(5.19)
102,360.7
(8.82)
594.8
(3.43)
126,088.4
(4.54)
2,251.3
(6.59)
101,759.7
(4.42)
14,146.5
(5.63)
50,896.8
(4.35)
1,323,825
(5.24)

536.6
(6.92)
1,230.0
(9.36)
45,942.1
(6.70)
49,945.0
(5.05)
116,439.8
(8.77)
622.2
(3.14)
148,321.4
(5.01)
2,320.2
(6.26)
114,584.3
(4.59)
15,526.2
(5.67)
53,206.7
(4.05)
1,514,300
(5.28)

Note: The figures in parentheses indicate the percentage share of motor vehicles tax in the States Own Tax Revenue.
For the bifurcated States of Bihar, Madhya Pradesh, Uttar Pradesh and the newly formed States of Jharkhand, Chhattisgarh and Uttaranchal, the growth rates and buoyancies are calculated for the relevant period i.e. 2001-02 to 2007-08.
Source: Various issues of Finance Accounts of different State Governments
* The figures for all States are taken from various issues of State Finances, RBI

13

18.0

1.6

11.4

0.9

13.2

1.1

9.1

0.9

14.1

1.3

16.9

1.3

11.2

1.0

25.2

1.7

14.6

1.1

16.0

1.2

15.1

1.3

13.0

1.06

The buoyancy of revenue from the motor vehicles tax measures the
responsiveness of the tax to a percentage change in its base. The buoyancy
figure indicates that the tax is buoyant 3 during 1993-94 to 2007-08 for allStates. In the case of State-wise revenue also most of the States exhibited
buoyant revenue. The States where the buoyancy is greater than unity are
Goa (1.18), Gujarat (1.20), Kerala (1.02), Maharashtra (1.26), Orissa
(1.15), Rajasthan (1.30), Tamil Nadu (1.02), West Bengal (1.29),
Arunachal Pradesh (1.24), Assam (1.35), Himachal Pradesh (1.55), Jammu
and Kashmir (1.48), Mizoram (1.61), Sikkim (1.30) and Tripura (1.67)
(Table 2.2). In the remaining States, the buoyancy of motor vehicles tax
(computed for the period 1993-94 to 2007-08) remains close to unity. In
the newly formed States of Chhattisgarh, Jharkhand and Uttaranchal, the
buoyancy figures for the period 2001-02 to 2007-08 are 0.77, 0.97 and
1.18, respectively. Similarly, in the bifurcated States of Bihar, Madhya
Pradesh and Uttar Pradesh, the buoyancy measure for the period 2001-02
to 2007-08 is 0.67, 1.08 and 1.15, respectively (Table 2.2). These results
show that the growth in the tax revenue from the motor vehicles tax is
quite responsive to changes in the States income in the different States.
The results indicate that given the potential for further growth in revenue
from MVT as well as the buoyancy of the tax, the States could raise
further resources from this tax.
Revenue from Passenger and Goods Tax
The collection of revenue from P&GT has been fluctuating.
Though the absolute revenue from P&GT has increased over the years, its
share as a percent of SOTR has declined to almost half from 4.11 percent
in 1980-81 to a mere 2.38 percent in 2007-08. The yield from the P&GT
initially increased at a slow pace in the nineties; from Rs.1,480 crore in
1993-94 to Rs. 1,508 crore in 1995-96 and further to Rs. 1,979 crore in
1998-99. It reached Rs. 2,075 crore in 2000-01 and Rs. 6,808 crore in
3

Symbolically, buoyancy coefficient (b) could be expressed as R/R Y/Y, where R

stands for revenue and Y stands for GDP (or GSDP). The functional form used to
measure buoyancy is of the type:

R = aY b

(1)
When this exponential form is transformed into a logarithmic form, it changes to:
log R = log a + b log Y
(2)
Where R is the revenue from Motor Vehicle Tax and Y is the GDP, and b is the buoyancy
coefficient. This relationship shows the percentage change in revenue with respect to a
percentage change in GDP.

14

2007-08 (Table 2.1). Accordingly, the growth rate and buoyancy of this
tax was higher for the period 1993-94 to 2007-08 than it was during 198081 to 1993-94 (Table 2.1).
The yield from the passengers and goods tax in 2007-08 was
highest in the State of Tamil Nadu (Rs.148,321 lakh), followed by Bihar
(Rs. 93,787 lakh), Madhya Pradesh (Rs. 91,644 lakh) and Karnataka (Rs.
83,734 lakh). Karnataka is the only State showing growth in the revenue
consistently since 1994-95. In Orissa, the yield from the passengers and
goods tax showed a sharp decline in the nineties. Initially, during 1993-94,
the revenue from this tax was quite low at Rs. 1.1 lakh. This fell to Rs. 0.4
lakh in 1997-98. The revenue increased to Rs. 3,418 lakh in 1999-2000.
Since then the revenue has increased at a steady rate and was Rs.38,493
lakh in 2004-05 and Rs. 57,400 lakh in 2006-07; in 2007-08, the revenue
stood at Rs. 62,690 lakh (Table 2.3). A similar picture prevails in
Rajasthan where the yield was decelerating in the nineties but increased
gradually to reach quite a large figure in 2006-07. The yield from
passengers and goods tax in Rajasthan, in 1993-94, was only Rs. 0.1 lakh
in 1993-94; it fell to Rs. 0.03 lakh in 1996-97 and further to Rs. 0.02 lakh
in 1998-99. However, the scenario was different in the next decade. The
revenue increased to Rs. 845 lakh in 1999-00; this further increased at a
steady rate to Rs. 2,310 lakh in 2001-02 and to Rs. 23,671 lakh in 200506. In 2006-07, this tax revenue stood at Rs. 24,760 lakh though it
declined to Rs. 16,061 lakh in the next year, i.e. 2007-08.
The Government of Punjab had enacted the Punjab Passenger and
Goods Tax Act, 1952. Under this Act, a tax was levied on the passengers
who travelled in a passenger transport vehicle. However, the State
Government faced multifarious problems in the collection of the Passenger
Tax. This reduced the revenue from this tax for this State. Therefore, this
tax was repealed in 1993 and a Special Road Tax was levied in its place.
This resulted in a fall in the yield from the P&GT from Rs. 2,507 lakh in
1993-94 to Rs. 5.3 lakh in 1994-95 and further to Rs. 0.1 lakh in 1997-98.
In 1998-99, it was reduced to Rs. 0.01 lakh. In both Maharashtra and
Madhya Pradesh, in 1993-94, the revenue from passengers and goods tax
was quite high, viz. Rs. 25,165 lakh and Rs. 21,797 lakh, respectively.
However, in both the States, the revenue from this tax has shown a very
fluctuating trend during 1993-94 to 2007-08 (Table 2.3).

15

The yield from this tax has been quite low throughout the period in
the special category States of Manipur, Mizoram and Uttaranchal, and in
the non-special category States of Gujarat, Kerala and Orissa. In
Nagaland, no tax was levied on passengers and goods until 2002-03. In
2002-03, the State started earning revenue from this tax. Revenue from
this tax was Rs. 81 lakh and this increased to Rs. 110 lakh in 2004-05 and
further to Rs. 219 lakh in 2007-08. In West Bengal, the yield from this tax
exhibited an irregular trend from around Rs. 18,468 lakh in 1993-94 to Rs.
777 lakh in 1995-96 and become negative in the following year, i.e. 199697. The yield increased slightly to Rs. 0.2 lakh in 1997-98 and gradually
increased to 106 lakh in 2001-02, but again fell to Rs. 81 lakh in 2002-03.
The decline in the yield continued till 2005-06 when it stood at Rs. 63
lakh. In 2006-07, the yield from this tax has shown a slight improvement
to Rs. 103 lakh and it further increased to Rs. 107 lakh in 2007-08.
The revenue from P&GT exhibited a very high growth rate in the
States of Rajasthan, Orissa, Andhra Pradesh, West Bengal, Jammu and
Kashmir, and Goa. In the bifurcated State of Bihar, the growth rate for the
relevant period, i.e. 2001-02 to 2007-08 was as high as 34.56 percent,
whereas in Madhya Pradesh and Uttar Pradesh (which were bifurcated in
the same period) the growth rate was 22.34 percent and 7.51 percent,
respectively. In the State of Kerala, the yield from passengers and goods
tax has been declining at a steady rate in the nineties from Rs. 6 lakh in
1993-94 to Rs. 0.01 lakh in 1997-98. In 1999-2000, the yield increased to
Rs. 1.2 lakh but it fell to Rs. 0.1 lakh in 2002-03. In 2003-04, the yield
picked up slightly and reached Rs. 5 lakh but thereafter the revenue from
this source has been of a negligible amount. Accordingly, the growth rate
calculated for the period 1993-94 to 2003-04 turned out to be negative (
0.19 percent) in Kerala. The tax revenue exhibited negative growth rates in
the States of Uttaranchal, Punjab, Gujarat, Himachal Pradesh and Kerala
(Table 2.3).
In many States, however, the growth rate during 1993-94 to 200708 was between 20 to 40 percent. These States were Tamil Nadu (22.02
percent), Goa (38.06 percent), and Jammu and Kashmir (41.08 percent). In
both Orissa and Rajasthan, the yield from passengers and goods tax was
found to be declining in the nineties. However, in the next decade, the
revenue from this tax improved significantly, exhibiting a high growth rate

16

Table 2.3: Trends in Passengers and Goods Tax in Different States

(Rs. lakh)

States
Andhra Pradesh
Assam
Bihar

1993-94
18.7
(0.005)
1,603.0
(2.62)
159.2
(0.09)

1994-95
11.7
(0.003)
1,672.8
(2.65)
9.2
(0.01)

1995-96
1.8
(0.0004)
1,607.8
(2.29)
610.7
(0.31)

1996-97
151.3
(0.031)
2,054.0
(2.68)
2,894.1
(1.29)

1997-98
49.9
(0.007)
2,242.5
(2.54)
8,689.3
(3.64)

1998-99
77.0
(0.01)
2,027.0
(2.06)
5,978.4
(2.24)

1999-00
62.1
(0.007)
2,110.7
(1.72)
9,391.6
(2.58)

2000-01
40.8
(0.004)
1,023.3
(0.72)
12,483.7
(4.25)

Chhattisgarh
Goa
Gujarat
Haryana
Himachal Pradesh
Jammu & Kashmir

250.0
(1.33)
11,743.8
(2.98)
16,152.0
(10.17)
3,521.9
(13.77)
378.6
(1.69)

325.6
(1.44)
6,540.5
(1.38)
19,480.1
(10.32)
3,976.8
(13.28)
461.8
(1.90)

468.6
(1.72)
10,729.7
(2.02)
20,116.4
(9.27)
4,580.4
(13.41)
796.7
(2.80)

475.7
(1.57)
9,618.8
(1.59)
25,964.0
(12.12)
6,526.0
(15.84)
1,207.4
(4.17)

586.5
(1.61)
3,826.3
(0.58)
33,121.0
(13.98)
9,680.0
(20.33)
2,380.3
(6.48)

382.9
(1.07)
6,213.9
(0.82)
31,581.3
(10.12)
11,510.7
(20.12)
494.7
(1.13)

394.7
(0.86)
8,887.5
(1.09)
32,385.1
(9.21)
10,483.0
(16.90)
746.0
(1.29)

1,307.3
(2.54)
2,603.4
(0.29)
36,666.6
(8.50)
4,304.6
(5.91)
1,427.2
(1.91)

Jharkhand
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Manipur
Meghalaya
Mizoram

13,268.0
(3.48)
5.6
(0.0024)
21,797.1
(8.14)
25,164.8
(3.27)
38.1
(2.06)
119.0
(2.48)
29.3
(6.30)

11,699.6
(2.73)
0.8
(0.0003)
17,127.0
(5.97)
27,910.6
(2.95)
36.4
(1.53)
135.1
(2.40)
28.6
(6.24)

16,834.3
(3.19)
0.2
(0.00006)
24,532.6
(6.97)
24,834.8
(2.27)
38.2
(1.37)
146.0
(2.20)
31.3
(5.42)

19,943.6
(3.46)
0.1
(0.00003)
29,717.2
(7.24)
20,087.3
(1.71)
37.8
(2.66)
571.2
(7.38)
30.6
(4.59)

23,438.0
(3.66)
0.0
(0.000002)
31,863.4
(6.98)
34,103.0
(2.49)
38.0
(1.06)
129.6
(1.76)
33.1
(4.20)

27,313.1
(3.93)
0.8
(0.00016)
41,300.9
(8.08)
28,101.9
(1.98)
32.3
(1.05)
138.9
(1.57)
34.4
(3.74)

33,759.8
(4.36)
1.2
(0.00024)
42,835.8
(7.39)
33,193.7
(1.92)
48.7
(1.22)
139.7
(1.36)
38.6
(3.60)

47,302.2
(5.23)
1.3
(0.00023)
33,385.3
(5.92)
10,022.6
(0.51)
48.5
(0.99)
141.9
(1.20)
51.4
(3.56)

2001-02
529.1
(0.042)
971.2
(0.62)
15,332.4
(6.28)
19,627.0
(9.85)
3,619.3
(6.36)
9,911.1
(1.07)
49,856.2
(10.03)
3,426.5
(3.74)
14,723.9
(17.17)
2,223.1
(1.07)
49,811.3
(5.06)
0.1
(0.00002)
26,240.3
(5.58)
102,738.9
(4.83)
43.7
(0.84)
160.9
(1.18)
52.9
(2.76)

2002-03
2,087.8
(0.165)
1,330.2
(0.69)
26,290.9
9.51
25,154.9
(10.81)
3,046.9
(5.06)
1,109.0
(0.12)
65,274.9
(11.76)
3,145.2
(3.54)
18,288.9
(18.75)
3,865.4
(1.70)
51,653.2
(4.95)
0.1
(0.00001)
35,119.9
(5.69)
24,502.6
(1.07)
67.2
(1.03)
163.5
(1.13)
56.6
(2.02)

2003-04
4,454.6
(0.323)
1,699.4
(0.82)
30,582.9
(9.10)
23,007.7
(8.89)
4,114.2
(5.79)
17,178.7
(1.54)
66,035.8
(10.40)
3,396.3
(3.45)
18,262.6
(15.85)
5,377.5
(2.36)
67,346.2
(5.36)
4.9
(0.00061)
39,099.4
(5.76)
23,191.2
(0.92)
61.9
(0.89)
202.3
(1.14)
61.0
(1.80)

2004-05
6,558.6
(0.403)
1,587.7
(0.59)
47,287.8
(14.15)
28,713.2
(8.90)
10,310.0
(12.04)
16,011.1
(1.24)
70,515.8
(9.48)
3,832.1
(3.06)
13,261.8
(9.47)
7,818.7
(3.26)
79,171.6
(4.93)
0
(0)
46,807.2
(6.02)
42,774.9
(1.40)
70.6
(0.87)
266.3
(1.28)
68.7
(1.74)

2005-06
5,035.2
(0.262)
6,151.8
(1.90)
61,338.1
(17.23)
39,532.9
(9.76)
13,079.7
(11.93)
15,630.0
(1.00)
75,759.9
(8.34)
4,261.0
(2.85)
23,627.3
(13.99)
9,666.0
(3.35)
104,144.9
(5.59
0.2
(0.000018)
57,857.9
(6.35)
50,463.4
(1.50)
67.8
(0.71)
276.4
(1.09)
99.4
(1.81)

2006-07
4,125.1
(0.172)
7,015.2
(2.01)
78,300.9
(19.41)
30,181.3
(5.98)
13,802.1
(10.69)
595.9
(0.03)
73,840.9
(6.76)
5,021.7
(3.03)
24,316.1
(12.78)
7,419.2
(2.37)
114,720.0
(4.92)
0
(0)
74,459.9
(7.11)
22,448.3
(0.56)
60.4
(0.50)
278.9
(0.92)
98.3
(1.45)

2007-08
8029.0
(0.28)
1,239.3
(0.37)
93,786.7
(18.44)
51,071.6
(9.09)
11,272.2
(8.29)
15,162.0
(0.69)
37,939.2
(3.27)
5,512.1
(2.81)
26,459.1
(11.51)
7,107.0
(2.00)
83,733.5
(3.22)
0

GR
73.7

Buoyancy
4.9

3.6

0.4

34.6

2.8

14.4

0.8

38.1

2.4

-2.6

-0.2

10.7

0.8

-1.7

-0.1

41.1

3.1

21.2

1.6

17.9

1.5

-0.2

-0.4

91,643.5
(7.63)
38,827.0
(0.82)
75.8
(0.51)
358.5
(1.12)
107.1
(1.38)

22.3

2.3

2.9

0.3

5.9

0.6

5.1

0.4

10.8

1.0

17

Nagaland
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh

1.1
(0.0012)
2,507.7
(1.17)
0.1
(0.00055)
7,187.9
(1.50)
19,455.4
(4.71)

0.5
(0.0006)
5.3
(0.0020)
0.1
(0.0006)
11,002.7
(1.89)
19,479.4
(3.99)

0.6
(0.0005)
0.3
(0.00012)
0.0
(0)
16,198.5
(2.27)
22,837.2
(4.18)

0.5
(0.0004)
0.8
(0.00029)
0.0
(0)
18,726.4
(2.35)
22,143.5
(3.51)

0.4
(0.0003)
0.1
(0.000033)
0.1
(0.00029)
21,495.7
(2.47)
22,236.0
(3.18)

0.6
(0.0004)
0.0
(0)
0.0
(0)
18,275.5
(1.90)
23,818.0
(3.01)

3,418.1
(2.01)
0
(0)
844.6
(1.85)
22,264.4
(2.04)
10,025.7
(1.07)

19,404.3
(8.88)
0.0
(0)
1,954.5
(3.82)
24,150.6
(1.97)
8,581.3
(0.78)

Uttaranchal
West Bengal
All States*

18,468.4
(6.34)
147,971
(3.19)

21,629.0
(5.80)
148,332
(2.66)

777.1
(0.19)
150,766
(2.36)

-6.4
(-0.0015)
166,262
(2.34)

0.2
(0.0001)
200,393
(2.47)

1.1
(0.0002)
197,915
(2.22

0.8
(0.0002)
209,867
(2.05)

2.4
(0.0004)
207,474
(1.76)

25,204.2
(10.22)
0.0
(0)
2,309.9
(4.08)
28,265.2
(2.17)
7,665.2
(0.74)
0.3
(0.00031)
106.4
(0.0164)
367,135
(2.87)

80.6
(1.30)
31,307.0
(10.90)
0.0
(0)
13,043.7
(20.19)
48,951.8
(3.41)
7,733.3
(0.61)
0.7
(0.00067)
80.5
(0.011)
356,931
(2.51)

103.1
(1.50)
37,719.4
(11.42)
0
(0)
15,050.3
(16.64)
61,094.4
(3.83)
8,020.9
(0.59)
0.1
(0.00005)
79.6
(0.0091)
418,992
(2.62)

110.2
(1.41)
38,493.2
(9.22)
0
(0)
14,401.4
(17.62)
76,387.1
(3.95)
8,173.9
(0.52)
0.01
(0.00001)
55.4
(0.0056)
520,602
(2.75)

134.5
(1.27)
46,334.0
(9.26)
0
(0)
23671.1
(26.06)
98,494.2
(4.22)
10,519.3
(0.56)
0.01
(0.00001)
62.8
(0.0060)
644,957
(3.04)

169.0
(1.42)
57,400.1
(9.46)
0
(0)
24,759.7
(24.19)
124,349.6
(4.48)
10,870.7
(0.47)
0
(0)
103.1
(0.0088)
680,831
(2.70)

219.0
(1.67)
62,689.9
(9.14)
0
16,060.6
(1.21)
148,321.4
(5.01)
10,965.2
(0.44)
0.04
(0)
107.1
(0.01)
680,800
(2.38)

21.0

2.3

198.1

9.6

-87.6

-17.2

250.6

11.7

22.0

1.9

7.5

0.7

-66.3

-8.5

85.5

6.9

13.6

1.1

Note: The figures in parentheses indicate the percentage share of passengers and goods tax in the States Own Tax Revenue.
For the bifurcated States of Bihar, Madhya Pradesh, Uttar Pradesh and the newly formed States of Jharkhand, Chhattisgarh and Uttaranchal, the growth rates and buoyancies are calculated for the relevant period i.e. 2001-02 to 2007-08.
For Punjab, the growth rate and buoyancy for passengers and goods tax is calculated for 1993-94 to 1998-99. For Nagaland, the growth rate and buoyancy for passengers and goods tax is calculated for 2002-03 to 2007-08. For West Bengal, the growth rate and buoyancy for
passengers and goods tax is calculated for 1997-98 to 2007-08. In Kerala, the growth rate and buoyancy of passengers and goods tax is calculated for 1993-94 to 2003-04.
No Data is available for the States of Arunachal Pradesh, Sikkim and Tripura.
Source: Various issues of Finance Accounts of different State Governments.
* The figures for P & G Tax for all States are taken various issues of State Finances, RBI

18

Bi
ha
r
G
oa
G
uj
ar
at
H
H
im
ar
ac
ya
ha
na
Ja
lP
m
ra
m
de
u
s
&
Ka h
sh
m
Ka
ir
rn
at
ak
a
M
K
ad
h y era
la
a
P
ra
de
M
ah
sh
ar
as
ht
ra
M
an
ip
M
eg ur
ha
la
ya
M
iz
or
am
N
ag
al
an
d
O
ri s
sa
Pu
nj
ab
R
aj
as
th
an
Si
k
k
Ta
im
m
il
N
ad
u
Tr
U
tta i pu
r P ra
ra
de
W
es
s
tB h
en
ga
l

An
dh
ra
Ar
un
Pr
a
ac
ha des
h
lP
ra
de
sh
As
sa
m

(As Percent of SOTR)

19
80
19 81
81
19 82
82
-8
19 3
83
-8
19 4
84
-8
19 5
85
19 86
86
19 87
87
-8
19 8
88
-8
19 9
89
19 90
90
-9
19 1
91
-9
19 2
92
19 93
93
19 94
94
19 95
95
-9
19 6
96
-9
19 7
97
19 98
98
-9
19 9
99
-0
20 0
00
20 01
01
20 02
02
-0
20 3
03
-0
20 4
04
-0
20 5
05
20 06
06
20 07
07
-0
8

(As Percent of SOTR)

Exhibit 2.1: Total Tax on Vehicles and its Components as a percent of SOTR
12.00

10.00

8.00

6.00

4.00

2.00

0.00

MVT
PGT
Total tax on vehicles

Exhibit 2.2: State-wise Total Tax on Vehicles as a Percent of SOTR

30.00

25.00

20.00

15.00

10.00

5.00

0.00

1993-94

2007-08

19

in Orissa and Rajasthan of 198 percent and 251 percent, respectively

(Table 2.3).
The buoyancy of the passengers and goods tax for all States,
computed for the period 1993-94 to 2007-08, turns out to be 1.26 though it
varies widely across the States (Table 2.3). In some States, this tax
revenue turned out to be highly buoyant whereas in some other States the
buoyancy was quite low and even negative. The buoyancy of the
passengers and goods tax, computed for the period 1993-94 to 2007-08,
was quite high particularly in the two States of Rajasthan and Orissa
indicating that the tax was highly buoyant in these two States. The other
States where this tax fared well and the buoyancy was greater than unity
were Andhra Pradesh (4.89), Goa (2.35), Jammu and Kashmir (3.14),
Karnataka (1.49) and Tamil Nadu (1.91). The buoyancy is computed for
the period 2001-02 to 2007-08 for the bifurcated States of Bihar (2.81),
Madhya Pradesh (2.26) and Uttar Pradesh (0.72) and also for the newly
formed States of Jharkhand (1.62), Chhattisgarh (0.82), and Uttaranchal (8.52). The buoyancy coefficient of passengers and goods tax for the period
1993-94 to 2007-08 turned out to be much less than unity and even
negative in some States such as Gujarat (-0.19) and Himachal Pradesh (0.10) due to the high level of fluctuations. In Nagaland, the passengers and
goods tax began to be levied from 2002-03 only and thus, the buoyancy of
this tax in the State (computed for the period 2002-03 to 2007-08) turns
out to be 2.28. In Punjab, the yield from the passengers and goods tax
declined steadily from 1993-94 till 1998-99 and slowly became
insignificant as it became almost a nil amount in the following years.
Thus, the buoyancy of this tax in Punjab (computed for the period 1993-94
to 1998-99) is negative (-17.19) implying that the revenue from passengers
and goods tax in Punjab was not at all responsive to the growth in the
States income. In Kerala, it is observed that the yield was very low since
1993-94 and in 2004-05, no revenue was realized from passengers and
goods tax. In the next year, the yield continued to be very insignificant.
Thus, the buoyancy of this tax in Kerala, computed from 1993-94 to 200304, turned out to be negative (-0.41) (Table 2.3).
Revenue from Total Tax on Vehicles

The fiscal significance of the total tax on vehicles (i.e. motor

vehicles tax and passengers and goods tax) shows that in 2007-08 these
taxes contributed about 7.66 percent to the own tax revenue of the States.

20

The yield from this tax for all the States taken together increased from Rs.
687 crore in 1980-81 to Rs. 2,6283 crore in 1990-91 and further to Rs.
21,951 crore by 2007-08 (Table 2.1).
The share of these taxes, however, varies across the States. The
lowest share of 2.94 percent was found in the State of Manipur (special
category State) in 2007-08. Among the non-special category States, West
Bengal recorded the lowest share of 4.06 percent. In the State of Bihar, its
contribution was 23.81 percent, the highest amongst the States (Table 2.4).
In most of the States, its proportion in the own tax revenue was less than
15 percent; the exceptions were States like Bihar (23.81 percent) and
Orissa (15.84 percent). However, there were some States where the share
was quite low, even less than 10 percent, viz. the States of West Bengal
(4.06 percent), Uttar Pradesh (5.03 percent), Maharashtra (5.33 percent),
Punjab (5.05 percent), Andhra Pradesh (5.85 percent), Uttarakhand (5.67
percent), Kerala (6.24 percent), Gujarat (6.68 percent), Haryana (5.28
percent), and Jharkhand (5.82 percent) (Table 2.4). In Uttar Pradesh, the
share declined from around 7.09 percent in 1993-94 to 5.68 percent in
1998-99. In 2000-01, it slightly improved to 5.73 percent but since then
decreased steadily to 5.46 percent in 2004-05 and further to 5.03 percent
in 2007-08. A similar tax scenario prevails in the State of Punjab, where
the share of total vehicles tax in revenue was 7.74 percent in 1993-94; this
dropped down to 7.19 percent in 1995-96 and then slightly improved to
8.18 percent in 1998-99 but again fell to 5.82 percent in 2004-05 and
further to 5.05 percent in 2007-08. The share of the total tax on vehicles
has been particularly low in the State of West Bengal and it fell from 9.38
percent in 1993-94 to 3.31 percent in 1998-99. In 2000-01, the share rose
slightly to 4.77 percent but declined to 4.06 percent by 2007-08 (Table
2.4).
In most of the special category States, the share of the tax on
vehicles in States own tax revenue remained below 10 percent in 2007-08
except for the States of Jammu and Kashmir, and Nagaland where it was
14.66 percent and 11.03 percent, respectively (Table 2.4).
From 1993-94 to 2007-08, the growth rate of revenue from tax on
vehicles for all the States taken together was 13.33 percent. Revenue from
total tax on vehicles showed a decline in the growth rates in the nineties.
In the State of West Bengal, the revenue from tax on vehicles exhibited a
decelerating growth rate and this was as low as 8.47 percent during the

21

period 1993-94 to 1999-2000. The growth rate of the revenue from tax on
all vehicles during the above period was low in the States of Manipur
(0.64 percent), Meghalaya (4.27 percent), Arunachal Pradesh (7.36
percent) and Assam (9.10 percent). However, the growth rate of the
revenue from the tax on vehicles in West Bengal during 1993-94 to 200708 turns out to be positive at 9.30 percent, which is very much higher than
its growth rate in the nineties.
The growth rate of this tax revenue during 1993-94 to 2007-08 was
also found to be higher compared to the nineties in the States of Manipur
(7.65 percent), Meghalaya (9.18 percent), Arunachal Pradesh (13.55
percent) and Assam (11.50 percent). The highest growth rate in the
revenue from tax on vehicles was in the State of Jammu and Kashmir
(31.05 percent), followed by Goa (24.92 percent), Tripura (25.17 percent)
and Orissa (22.78 percent). In the bifurcated States of Bihar, Madhya
Pradesh and Uttar Pradesh, the growth rate of revenue from this tax
calculated for the relevant period, i.e. 2001-02 to 2007-08, stood at 25.58
percent, 15.96 percent and 13.83 percent, respectively. In the newly
formed States of Jharkhand, Chhattisgarh and Uttaranchal, the growth rate
of the revenue from tax on vehicles turned out to be 14.51 percent, 14.19
percent and 15.98 percent, respectively. Thus, in each of these six States,
the growth rate of the tax on vehicles lies above 10 percent. The growth
rate ranged between 15 and 16 percent during the period 1993-94 to 200708 in the States of Madhya Pradesh (15.96 percent), Rajasthan (16.14
percent), Mizoram (16.31 percent) and Sikkim (16.89 percent) (Table 2.4).
The buoyancy coefficient of the tax on vehicles for the period
1993-94 to 2007-08 for the States indicates the relationship between the
tax on vehicles and the States income (GSDP). The coefficient of
buoyancy for all States taken together was greater than unity (1.21) (Table
2.1). A similar situation prevailed in most of the States with the highest
buoyancy (2.48) recorded in the State of Jammu and Kashmir. The
increase in revenue with respect to increase in GSDP was more than unity
in the States of Andhra Pradesh (1.03), Goa (1.67), Gujarat (1.03),
Karnataka (1.16), Kerala (1.02), Orissa (1.86), Rajasthan (1.46) and Tamil
Nadu (1.33). Also, the tax on vehicles turned out to be highly buoyant in
some of the special category States. These States were Arunachal Pradesh

22

Table 2.4: State-wise Total Tax on Vehicles

State

1993-94

Andhra
Pradesh
Arunachal
Pradesh
Assam

30,067.3
(7.84)
66.4
(18.29)
4,524.5
(7.38)
10,425.0
(5.96)

Bihar
Chhattisgarh
Goa
Gujarat
Haryana
Himachal
Pradesh
Jammu &
Kashmir
Jharkhand
Karnataka
Kerala
Madhya
Pradesh
Maharashtra
Manipur
Meghalaya
Mizoram
Nagaland
Orissa
Punjab
Rajasthan
Sikkim
Tamil Nadu
Tripura
Uttar
Pradesh
Uttaranchal
West
Bengal
All States

..
1,103.5
(5.88)
29,213.1
(7.41)
21,368.4
(13.45)
4,678.0
(18.29)
1,054.9
(4.70)
..
39,246.1
(10.29)
15,111.6
(6.44)
42,805.1
(15.99)
52,212.5
(6.78)
167.6
(9.05)
370.6
(7.73)
85.6
(18.40)
270.0
(14.79)
8,644.7
(10.05)
16,635.6
(7.74)
18,063.2
(9.26)
52.1
(3.64)
38,557.6
(8.03)
126.0
(3.40)
29,304.8
(7.09)
.
27,337.7
(9.38)
406,224
(8.75)

1995-96
46,144.6
(11.20)
99.1
(12.92)
5,606.3
(7.98)
16,390.4
(8.31)
..
1,721.8
(6.34)
41,298.5
(7.76)
25,398.5
(11.71)
5,812.0
(17.02)
2,018.9
(7.09)
..
62,437.5
(11.84)
22,286.9
(6.59)
55,403.2
(15.75)
67,154.0
(6.14)
172.2
(6.17)
459.9
(6.94)
110.2
(19.07)
291.6
(14.02)
10,751.0
(9.54)
19,065.4
(7.19)
24,650.7
(9.03)
125.1
(6.04)
55,419.3
(7.75)
136.2
(2.84)
35,383.0
(6.47)
..
12,690.2
(3.07)
523,399
(8.20)

1998-99
69,525.2
(8.73)
101.5
(8.99)
6,110.3
(6.22)
22,474.0
(8.41)
..
2,828.2
(7.92)
52,235.2
(6.86)
38,718.6
(12.41)
13,258.5
(23.18)
2,308.5
(5.29)
..
65,992.5
(9.50)
32,331.5
(6.95)
79,526.1
(15.57)
91,797.0
(6.46)
143.2
(4.66)
428.4
(4.85)
187.4
(20.37)
437.0
(12.37)
14,318.7
(9.63)
26,671.9
(8.18)
36,435.8
(9.25)
151.4
(5.32)
70,089.8
(7.28)
350.5
(4.17)
44,948.0
(5.68)
..
15,807.6
(3.31)
700,315
(7.87)

2000-01
83,437.6
(7.91)
112.1
(5.42)
8,400.3
(5.95)
34,881.2
(11.89)
.
4,299.3
(8.35)
65,331.2
(7.22)
45,235.4
(10.49)
10,408.7
(14.29)
3,759.4
(5.03)
..
97,484.3
(10.78)
39,486.3
(6.73)
73,974.6
(13.12)
88,606.7
(4.49)
328.5
(6.69)
608.2
(5.13)
253.2
(17.55)
528.6
(9.40)
37,221.5
(17.04)
33,831.6
(6.91)
53,085.0
(10.02)
154.4
(2.35)
83,194.4
(6.77)
425.8
(3.39)
62,889.6
(5.73)
2,163.2
(7.33)
28,255.1
(4.77)
874,029
(7.41)

2004-05

2005-06

2006-07

123,422.4
(7.59)
220.6
(4.46)
15,059.4
(5.55)
68,566.2
(20.52)
47,893.0
(14.84)
16,188.3
(18.90)
122,103.6
(9.42)
84,556.9
(11.37)
14,614.4
(11.67)
17,429.4
(12.45)
20,842.6
(8.68)
177,470.6
(11.04)
61,047.5
(6.81)
95,672.6
(12.31)
160,489.4
(5.24)
405.2
(4.99)
1,011.6
(4.87)
448.5
(11.33)
840.1
(10.73)
72,303.8
(17.31)
40,393.2
(5.82)
96,122.1
(11.42)
324.3
(2.77)
177,861.9
(9.19)
1,045.5
(4.36)
85,757.8
(5.46)
9,890.9
(6.85)
52,821.9
(5.32)
1,601,693
(8.47)

140,609.0
(7.32)
298.9
(4.84)
21,743.2
(6.73)
91,582.2
(25.72)
60,129.5
(14.84)
19,464.0
(17.75)
131,027.4
(8.35)
92,972.4
(10.24)
14,411.6
(9.63)
28,544.1
(16.90)
23,497.5
(8.13)
214,689.7
(11.52)
62,850.7
(6.43)
113,460.0
(12.45)
181,373.9
(5.41)
401.9
(4.23)
1,149.7
(4.55)
534.4
(9.71)
1,005.9
(9.53)
86,919.5
(17.38)
43,119.2
(4.80)
114,489.3
(11.59)
424.4
(2.88)
210,987.4
(9.05)
1,742.9
(5.89)
107,039.7
(5.68)
11,484.6
(6.44)
53,819.1
(5.18)
1,841,367
(8.67)

140,598.7
(5.88)
293.1
(3.75)
22,130.0
(6.35)
96,438.6
(23.91)
55,486.6
(11.00)
21,258.4
(16.46)
119,711.0
(6.48)
96,207.0
(8.80)
15,656.3
(9.45)
30,712.4
(16.14)
29,246.2
(9.35)
252,169.7
(10.82)
70,774.4
(5.93)
137,889.5
(13.17)
206,554.5
(5.15)
379.6
(3.12)
1,213.2
(3.98)
599.8
(8.87)
1,395.0
(11.72)
100,053.7
(16.50)
46,804.8
(5.19)
127,120.4
(10.95)
594.8
(3.43)
250,438.0
(9.02)
2,251.3
(6.59)
112,630.4
(4.90)
14,146.5
(5.63)
50,999.9
(4.36)
2,004,656
(7.94)

2007-08
168,408.8
(5.85)
642.0
(6.55)
15,101.2
(4.50)
121,107.4
(23.81)
78,765.5
(14.02)
19,468.3
(14.33)
146,171.1
(6.68)
613,180.3
(5.28)
11,024.3
(5.63)
33,719.5
(14.66)
20,673.5
(5.82)
167,467.0
(6.44)
85,317.2
(6.24)
161,905.6
(13.47)
253,137.5
(5.33)
432.9
(2.94)
1,493.4
(4.68)
643.7
(8.30)
1,449.0
(11.03)
108,632.1
(15.84)
49,945.0
(5.05)
132,500.5
(9.98)
622.2
(3.14)
296,642.8
(10.02)
2,320.2
(6.26)
125,549.5
(5.03)
15,526.2
(5.67)
53,313.9
(4.06)
2,195,100
(7.66)

(Rs. lakh)
GR
B
12.0

1.0

13.6

1.2

11.5

1.2

25.6

2.1

14.2

0.8

24.9

1.7

12.9

1.0

11.3

0.8

7.3

0.6

31.1

2.5

14.5

1.2

13.7

1.2

12.1

1.0

16.0

1.6

10.5

1.0

7.7

0.7

9.2

0.8

16.3

1.5

13.0

1.1

22.8

1.9

8.7

0.9

16.1

1.5

16.9

1.3

14.9

1.3

25.2

1.7

13.8

1.3

16.0

1.2

9.3

0.7

13.3

1.08

Note: Figures in parentheses indicate the percentage share of total tax on vehicles in the States Own Tax Revenue. G= Growth Rate; B= Buouancy.

For the bifurcated States of Bihar, Madhya Pradesh, Uttar Pradesh and the newly formed States of Jharkhand, Chhattisgarh and Uttaranchal, the
growth rates and buoyancies are calculated for the relevant period i.e. 2001-02 to 2007-08.
Source: Total taxes on vehicles for all States taken from State Finances, RBI; other data drawn from Comptroller and Auditor General of India, Finance Accounts,
New Delhi.

23

22

3
Economics of Road
User Taxes
Introduction
The analysis in the previous chapter clearly highlights the fiscal
significance of road user taxes in India. The trend indicates that
whereas road user taxes are one of the constituents of States own
revenue, these do not play a very significant role in financing highway
expenditure in the country. This is primarily due to the fact that the
theories of road pricing do not facilitate a proper solution to determine
the required rate of road user taxes.
The pricing mechanism is generally meant to solve two
different problems simultaneously. One problem relates to the
allocation of resources to a particular use. There then arises the issue of
allocating the goods and services produced among the members in that
particular economy. In a competitive framework, the pricing
mechanism solves both the problems simultaneously with the
equilibrium set of prices. This solution is efficient from the point of
view of resource allocation as well as in the use of existing facilities.
However, when the two problems are not solved simultaneously, there
arises ambiguity about pricing principles. This is particularly true in
the case of roads.
Issues in Road Pricing
Roads are different from other economic activities. First, these
are specific to location. Second, there are significant economies of
scale in the production of road services. Third, their capacity and
quality are in the nature of joint products. And fourthly, their services
are generally sold under conditions of state monopoly.

24

Given the above inherent characteristics of roads, the efficient

price for road use is determined by the short-run marginal cost
resulting from road usage1. Every time a vehicle uses a given stretch of
road, it results in wear and tear of the road. The user cost is, thus, to be
established at the level covering the cost of damage done to the road.
Since this prescription does not allow for recovery of capital
investment on roads, the pricing of road faces several problems.
In the long-run, such a method of pricing could lead to
excessive development of the road transport sector relative to other
modes. Accordingly, in the long run, pricing in road transport sector is
mainly done on the basis of the long run marginal cost principle.
Assuming a perfectly competitive industry, this pricing would result in
efficient allocation of resources. But in reality, for a perfectly
competitive firm supplying road services and investing in road
capacity, the main constraint is the road capacity which cannot be
adjusted in small units. In equating price with long run marginal cost it
is assumed that the roads are like putty. That is, it can be adjusted in
small units. The firm can expand capacity for one additional vehicle
journey if the price is higher than the cost involved in expanding
capacity. However, road capacity cannot be expanded or contracted by
small amounts. Thus, it is economically desirable to invest in roads
which are un-congested if augmentation in quality and resultant
savings in user costs (duly discounted) are greater than the investment
expenditure.
Furthermore, road investment decisions are to a significant
degree irreversible. This means that the long-run cost curve does not
represent the locus of minimum cost for providing each of the capacity
levels. This is a basic requirement of optimality of long-run
competitive equilibrium. In road capacity expansion, there is no such
thing as the minimum long run cost curve. Depending on past
investment decisions, the behavior of long-run cost curves will vary.
The implications of these inherent characteristics of roads are that
long-run costs have no economic significance in determining road user
charges.
Another implication is that efficient road pricing (designed to
ration out the available road capacity) cannot, at the same time, solve
the allocation problem. Given the inherent characteristics of roads and

Walters, A. A. (1968), The Economics of Road User Charges, Johns Hopkins Press,
Baltimore.

25

user charges, irrespective of how these are determined, these do not

indicate the "right" amount of road capacity that should be provided.
The theories of welfare economics analyze the way consumer
benefits can be maximized through the best possible allocation of
resources among different uses. In a perfectly competitive market, if
we consider the inverse demand function P=F(Xd) where P indicates
the price of the output and Xd the quantity demanded, then maximizing
the total value of consumption would be equivalent to the
maximization of the area under the demand curve for all commodities.
Price determines the output supplied. In a general equilibrium
framework, the price settles at a level where the marginal benefit
equals the marginal cost in each sector; the resulting allocation is
efficient and indicates the best possible allocation of goods and
resources. If in any sector there is excess demand, then the price rises
in that sector and additional resources are channeled into that sector
and the process of adjustment continues until the equilibrium level
(where P=MC) is restored.
In the case of roads, however, this type of analysis is not
applicable. Road projects bring about discrete changes in output
(capacity) as well as lead to improvements in quality. As a result,
observed prices do not serve as adequate measures of benefits.
Typically, these prices understate the value to road users of a discrete
change in output. This is because consumers will generally be willing
to pay an amount in excess of the single price charged. That is, discrete
changes in output will generate a consumers surplus. Therefore, in the
case of roads, the price gives way to consumers surplus as a measure
of benefit2. Also since prices can no longer automatically determine the
allocation of resources to the road sector, the problem of investment
becomes the problem of evaluation of alternative projects on the basis
of cost-benefit analysis.
Concept of Road User Tax
Historically, the local population (especially the landowners)
was responsible for the repairs of roads and bridges. Since they were
the dominant users and beneficiaries of such roads, this was found to
be the ideal approach. Each individual had to devote time and money

This was pointed out by Dupuit, the French engineer, in the context of an attempt to
bring out the effect that the optimum of the general welfare corresponds to the sale of
every thing at marginal cost. See, Dupuit (1844), On the Measurement of the Utility
in Public Works, Annales des Ponts et Chausses, Series No. 2, No. 8, 1844, (English
Translation by R. H. Barback in International Economic Papers, No. 2).

26

to maintain the roads. Land owners were levied special assessments for
access roads because land would have little value if it were
inaccessible. Anyone who caused extraordinary damage to a road
could be held accountable for its repair.
This framework was based on a static theory of roads; the
emphasis was on maintaining the roads, not on improving them or
providing for an expansion of the road network. With the development
of commerce and trade in the latter part of the 18th century, a more
dynamic view of roads emerged. Certain routes began to be used as
important inter-city routes thereby losing much of their local service
characteristics. At the same time, roads continued to be built and
maintained by property taxes collected in the successive towns along
the routes. Thus, a divergence was created between costs borne by
local property owners and the benefits resulting from the provision of
the route to travellers passing by. Moreover, local governments did
not have capability to develop highways to the degree that was
required. As a result of this and also because centralizing of such a
function was generally opposed, the toll road movement developed.
Heavily traversed routes were converted into turnpikes that were
financed by tolls levied on the actual users of the facility. The
professionals replaced amateur road builders and road taxes replaced
statute labour requirements or local assessments levies.
In the early part of the present century, the automobile
revolution
rapidly endowed the roads with a transportation
significance of a sort that outweighed their more general social
implications. Since certain road users would seem to receive most
benefit from these improvements, it was inevitable that the gap
between social and private road costs once again became an important
problem. Moreover, it became clear that the main resources of road
financing, especially the property tax, were inadequate. Accordingly,
the custom has been to shift varying proportions of the public road
expense directly onto the vehicle operators by means of fuel taxes and
registration fees. Taxes of this nature were used not only to bring road
users' private track costs into alignment with the social costs of
providing and maintaining roads but also, in some cases, as a source of
general tax revenue. To begin with, the registration fee began as a
modest one-time payment to cover motor-vehicle registration for the
purpose of identification. Consequently, to augment revenue to meet
the demand for better roads, the motor-fuel tax was imposed. Further,
taxes on receipts of tonne-miles travelled, often referred to as thirdlevel structure taxes, were imposed thereby reflecting the acceptance of
a greater road cost responsibility on the part of heavier vehicles and/ or

27

commercial vehicles. However, the motor-fuel tax has assumed a

dominant fiscal role all over the world, the underlying basis being the
metering of road services.
The removal of roads from their dominant local role, thus,
resulted in the acceptance of the idea that road services could be
developed by ordinary investment standards and financed by specific
beneficiaries, viz. the motor vehicle and its user rather than the general
public. Fuel consumption, tyre wear and other aspects of vehicle
operations determined the various types of improvements to be
effected in a road, and hence, these were the basis for ascertaining the
warranted expenditure on roads. There was also the strong belief that
the rate of road improvement should depend upon the appearance of
opportunities for profitable investment according to business standards
and should depend upon the exigencies of politics and the state of the
public treasury. Thus, the altered view of road functions has been
reflected in the special taxes whose purpose is road financing and
whose basis is road use3.
Why Road User Taxes?
The distinguishing feature of governmental supply of a private
good is its employment of a user tax as a means of financing the good
or service. A user tax (price) is defined as the price one paid incident to
the ownership and operation of a vehicle. Alternatively, it could be
defined as a payment which a motor vehicle operator is required to pay
over and above his payment of other taxes.. The user tax is meant to
recover for the government some part or all of the costs of supplying
road services through direct charges on those using the same. In order
that user prices effectively replace taxes as a means of financing
publicly supplied services, there has to be a possible measure of the
individuals share in the total usage of the services. But this in itself is
not a sufficient condition to warrant a user price. In addition, there
must be equity or an efficiency reason or both. If the benefits of
publicly supplied services are enjoyed mainly by the direct users, that
is, if these benefits do not spill over to people other than the direct
users, there seems no reason why the others should be called upon to
pay the costs. Further, the user price (as with any price in a market
economy) must serve the essential function of rationing the available
supply among many possible demands.
These financing devices that are used are still called taxes.

Petersen, S. (1932), Highway Policy on a Commercial Basis, Quarterly Journal

of Economics, pp. 417-443.

28

What needs to be noted is that these taxes, which have long been
recognized as benefit taxes, are essentially user taxes. Road user tax
has been universally justified on the basis of the benefit principle.
Accordingly, road finance theories place only slight reliance upon the
ability to pay, the common basis for the majority of existing tax
levies. Great reliance is placed on the ability to pay principle where
services are provided as though benefits and amounts consumed are
equal. But in cases where budget activity does not deal with services
consumed in more or less equal quantities by all, it is often possible
for such services to be supplied on the basis of the benefit approach.
The necessary condition here is that the services and the groups
benefiting from them must be clearly defined.
Thus, it has long been recognized that road users are a natural
group to pay taxes on a quid pro quo basis. Yet there exist
complications in such an approach. Though it is often easy to identify
the various road users it is not always clear that they are the only
beneficiaries. Further, there is also disagreement over the assumption
that all road users receive equal benefits. Thus, in the standard
treatment of the theory of road finance, it is assumed that it is
necessary to divide road provision costs in the first instance between
road users and non-users, and in the second instance, among classes of
road users.
To begin with, it was widely agreed that roads should be
financed "equitably". This was supplemented by the idea that the usertax structure should foster economic development and efficient
utilization of the transport system in an economy. The non-user share
is a transfer from general funds to the roads. This transfer is justified
on the basis that roads yield important indirect benefits, external
economies or spill overs which accrue to people other than the
highway users. However, it was often felt that such transfers contain
elements of subsidy which if not properly evaluated could frustrate the
objectives of economic efficiency and equity.
Consideration of the non-user share is particularly instructive
because it requires evaluation in terms of a general theory of public
subsidy. As a matter of equity, it is maintained that external economies
warrant a general tax contribution to the road program. However,
though it is desirable to have such subsidies in order to achieve the
broader social objectives , it is possible to resolve many issues through
a simultaneous application of two welfare standards- the theory of
collective demand and the marginal cost price standard. These coordinated standards do not require a choice between "market" and

29

"public" allocations or between the private system or the tax system.

The problem relates to the manner and proportions in which private
and collective demands are combined"4. This is reflected in the twopart tariff system that prevails in the case of road taxes.
Exponents of user-tax principles are normally unwilling to
accept the view that road systems should be considered as an integrated
system for the purpose of financing solely with the levy of user
taxation. Part of the reluctance to accept fully a commercial view of the
highway function stems from the variability of costs and uniformity of
taxes. But more important is the consideration that the cost of road
facilities should be fully allocated to the various beneficiaries thus
countering the view that benefits derived from roads are not to
different from benefits to the user of the road. Thus, if the tendency is
to move from a collectivist view to a commercial view, the apparent
goal is fulfilled since the persons who support the spread of road costs
with reference to the numerous benefits also endorse the principle that
traffic should govern road investment.
But the real weakness of the benefit argument stems from the
fact that all public and private expenditures affect the economy.
Indirect benefits of material value will flow through the economy to
others, other than those who directly consume the products. A feature
of the private economy is that consumers are expected to defray the
full costs of product or service expenditure that provide indirect
benefits to others, independent of the general social and economic
values. Value to the direct purchaser is all that matters, collateral
influences being accepted as incidental. Most production is socially
important but so long as the ordinary demand for the product is
sufficiently great, the social by-product is incidentally valued and we
need not emphasize its social implications.
When the public policy is in favour of the idea that principles
applicable in the private sector of the economy should generally
prevail, a case for subsidization with general tax support meets with
approval only when products or services deemed desirable by society,
either now or in the future, will not be forthcoming without assistance.
We subsidize socially important but otherwise neglected enterprises,
but we do not do so because they are socially important but because
they are otherwise neglected. To grant that there may be reasons to
supply road facilities over and above those that would be supplied to

Kafoglis, M. (1963), Highway Policy and External Economies, National Tax

Journal, Vol. 16, pp.68-80.

30

meet the effective demand of users is quite a different thing from

justifying general tax support on the basis of benefit apportionment.
Thus, the possibility of construing the road function in common
welfare terms does not establish the desirability for doing so.
Formulation of road policy almost wholly with reference to traffic
considerations would probably cause no serious neglect of needed
requirements nor work injustice upon those required to bear the cost5.
Historically, practice reveals a further distinction of the general
"benefit principle" based on two schools of thought. One postulates
that road user taxes should be based on the cost of service while the
other recommends that road taxes should be based on the value of
service. The first principle is shown to be charges that would result
under simple competition and the value of service principle is shown to
be charges that would result under monopoly price discrimination.
Cost of service leads to prices that vary as incidental costs are attached
to each service.
Typically, a number of schemes have been derived to divide the
costs of road provision between road users and non-users. One such
method "The Relative Use Method" apportions the cost of each road
according to the different purposes for which the road used. The costs
assigned to through traffic are all paid by road users and the costs
assigned to the provision of access roads are paid by property owners;
the costs of providing for neighborhood traffic are divided between
users and the community. Under such a scheme, effective collection of
taxes is never made upon the basis of actual apportionment. These
collections are always made on an average basis. Thus, even if total
road costs are recovered, there may still be external effects between
various groups and all of society.
In the "Predominant Use Method", a three way division for
road tax responsibility is made between access, trunk roads and other
roads. Thus, all urban and rural access roads have their costs financed
by property taxes. The predominant beneficiaries of the main roads are
the users. All the remaining roads falling between the two extremes,
whether urban or rural, are financed by the community out of general
revenue. Again the scheme is designed to recover the annual average
financial cost of providing the system.
Under the "Earnings Credit Theory", costs of the road system
would be computed per vehicle mile / kilometer and this cost would be

Petersen, S. (1932), Highway Policy on a Commercial Basis, Quarterly Journal

of Economics, pp. 417-443.

31

applied to traffic all the way down through various levels of the road
system, from the main trunk routes to access roads. The amount by
which motor-tax revenue fell short of meeting these costs would be
assumed to be the responsibility of the local tax payer or property
owners. Once again, this appears to be a cost of service allocation
mechanism.
In the "Incremental Cost Theory", an attempt is made to
allocate specific costs to specific groups. However, in the case of costs
incurred "jointly', there is no recovery from others under this method.
Thus, it is observed that when it comes to allocation of costs
among road users, the recovery of costs has been the guiding principle
with the system of averaging leaving open the scope for external
effects to persist amongst geographically separated groups of users and
among vehicle classes.
Thus, a major weakness of user taxation is that it cannot be
(and has not been) adapted to the variability of road costs in terms of
service units. However, apportionment of the road burden can be
favourably influenced by stressing cost earnings relationships. In the
face of a disparity between costs and earnings on particular facilities, a
legitimate claim to general tax revenues or a case for special
assessment or toll financing might then be established. One of the
results of the failure of existing and suggested tax systems to eliminate
external effects between non-users and all road user groups is that user
taxes may have little relation to the social costs of providing given
roads. While a nationwide system of toll roads is an impractical idea,
segments of a road network have been successful as toll roads in some
countries. However, certain issues have arisen from these toll roads.
We examine these aspects in the next section.

32

4
Structure of Taxes on
Motor Vehicles
India has a federal political and administrative framework
under which the Central, States and local authorities have well defined
powers for taxation and management of roads and road transport. The
jurisdiction of each tier of Government for the levy of tax is earmarked
in the Seventh Schedule of the Constitution. The powers within the
jurisdiction of the Centre are enumerated in List I and those within the
legislative powers of the States are mentioned in List II. The
Concurrent List, as mentioned in List III, inter alia, gives tax powers
and principles to levy taxes on motor vehicles.
For the road transport sector, regulation and taxation of motor
vehicles are treated as two distinct powers in the Indian Constitution.
While the former falls within the concurrent list (list III, entry 35) and
the power is exercised by both the Central and State Governments;
taxation of motor vehicles is clearly within the ambit of State
legislative competence. Except for the national highways, the
responsibility for roads is vested in the State governments. Both
Central and State Governments impose taxes on vehicle purchase,
vehicle ownership and vehicle use.
Several taxes are levied on transport industry; some affecting it
directly, the others indirectly. The major taxes levied on this sector are:
Central VAT (CenVAT) and the Central Sales
Tax (CST)1. levied by the Central Government;

CST falls in the Central List but has been assigned to the States. The tax is collected
and retained by the States. The Central Government decides only the rate of tax.

33

 motor vehicles tax, passengers and goods tax,

State VAT, entry tax, and toll taxes levied by the State
governments; and
octroi levied by the local bodies.
All these taxes, levied by different tiers of governments, impact
the transport industry in three different ways , viz. those affecting
purchase of vehicles, those concerning ownership of vehicles, and
those related to the operation or use of vehicles.
Taxes on the Purchase of Vehicles
Taxes on the purchase of vehicles are levied on the acquisition
of vehicles and include once for all payments of CenVAT, custom
duty, and State VAT. The CenVAT is levied by the Central
Government on the manufacture of motor vehicles. The tax is collected
at the time of clearance of vehicle at the factory gates. However, the
procedure of duty collection follows the principle of value added tax.
The rate of CenVAT is 10%.
Custom duty is also levied on the purchase of vehicle at the rate
of 10 percent, except for the motor cars and motor cycle, where the rate
is 61 percent, inclusive of National Calamity Contingent Duty
(NCCD). Additional duty of excise and CVD is also levied at the rate
of 4 percent over and above custom duty (Table 4.1).
In addition, the Central Government regulates motor vehicles
under the Indian Motor Vehicles Act, 1988, and Central Motor
Vehicles Rules, 1989. The levies charged under the Act are for
registering motor vehicles; obtaining driving licenses; transfer of
ownership of motor vehicles; permit for transport vehicles; and
certificate of fitness for transport. It includes fees levied for
registration, permit, and driving license. The fees have been raised and
restructured from time to time.
Apart from above taxes on the possession of vehicles, the
Central Government levies a Central Sales Tax (CST) on the inter-state
transaction. Currently, the rate of CST is 2%.
The motor vehicles are thus subject to two separate enactments
with different objectives. One is of regulatory nature called the Central
Act of 1988, and the other one with a revenue objective levied by all
the States under the respective States Acts. State Governments levy
state-VAT on the purchase of motor vehicles. The rates of state-VAT
on motor vehicles vary from State to State but in general are taxed at
the rate of 12.5% (Table 4.1). It is levied at the rate 14.5 percent and 14

34

percent in Andhra Pradesh and Bihar, respectively; while it is levied at

the rate of 13.5 percent in Assam, Jharkhand and Karnataka. Some of
the States also levy an entry tax to compensate for the difference
between the State VAT rates in the State and those prevailing in the
other States if the vehicle is registered in another State and brought to
the State concerned within a specified period. This tax operates more
or less on the pattern of the use tax prevalent in USA.
Octroi is also levied in 16 Municipal Corporations of
Maharashtra only. The tax has been abolished in all other States. It is
levied when vehicle is brought into a local area for sale by a dealer.
Table 4.1: State-wise Tax on Purchase of Motor Vehicles
(In Percent)

States
Andhra Pradesh
Arunachal Pradesh
Assam
Bihar
Chhattisgarh
Delhi
Goa
Gujarat
Haryana
Himachal Pradesh
Jammu & Kashmir
Jharkhand
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Manipur
Meghalaya
Mizoram
Nagaland
Orissa
Punjab
Rajasthan
Sikkim
Tamil Nadu
Tripura
Uttar Pradesh
Uttarakhand
West Bengal

Taxes on Purchase of Vehicle

Import Duty*
CenVAT$
STVAT
10
10
14.5
10
10
12.5
10
10
13.5
10
10
12.5
10
10
14.0
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
13.5
10
10
12.5
10
10
13.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5
10
10
12.5

Total
30.5
32.5
33.5
30.5
34.0
32.5
32.5
32.5
32.5
32.5
33.5
32.5
33.5
32.5
32.5
32.5
32.5
32.5
32.5
32.5
32.5
32.5
32.5
32.5
32.5
32.5
32.5
32.5
32.5

Note: * Custom duty on motor cars and motor cycles is 61 percent inclusive of National
Calamity Contingent Duty.
$ This rate is for the motor car of the length not exceeding 4000 millimetre.
Additional Excise Duty and CVD at the rate of 4 percent also leviable over and above
custom duty.

35

Taxes on Ownership of Vehicles

These taxes include recurring charges levied on vehicles during
the period of ownership, usually in the form of an annual tax. This
category includes motor vehicle tax, registration fee, fees for transfer
of ownership of vehicle, and entry tax. Several criteria have been
adopted to differentiate motor vehicles for taxation purposes, each
reflecting one of the many objectives of the levy. There is also
considerable diversity in vehicle classifications among States making
comparisons of some rates difficult.
Motor Vehicle Tax (MVT) / Road Tax
The avowed purpose of motor vehicle tax (MVT) is to defray
the costs of road maintenance out of the revenue realized from user
charges. Besides, motor vehicle taxation is also geared to fulfil other
objectives like the reduction of both congestion and pollution.
However, multiplicity of objectives results in complex tax structures,
cross-classifications and unintended economic and welfare effects.
Broadly the rationale behind motor vehicle taxation is two-fold. First,
levies on the road transport sector can be justified as approximate user
charges. MVT in the form of registration charges are essentially a
charge on access to road network. In fact, the more a motor vehicle is
used, the less the vehicle charge per kilometer travelled. But while
access charges may vary according to vehicle type, they do not
discriminate according to usage.
The current structure of MVT in India is primarily based on
ownership and only indirectly linked to consumption (of the road
transport service). Hence it is not a perfect user charge. Second, MVT
is supported on the ground that it has a fast growing base and an
important source of tax revenue for the States. MVT is being levied in
all States and UTs except the UT of Lakshadweep. Existing tax
structure for commercial vehicles shows wide variations among States.
There are different bases for computation and different rates, leading to
differing incidence of taxes per vehicle in different States. In fact, it is
not easy to make comparisons of rates levied on different types of
vehicles in different States. Inter-State comparisons are somewhat
difficult due to different classification principles for the taxation of
vehicles in different States; variations in the application of lifetime
and annual tax rates to vehicle categories; use of specific and ad
valorem rates; and multiplicity of rates. In addition, several criteria
have been adopted to differentiate motor vehicles for taxation purposes
across the States making comparisons of incidence difficult.

36

Motor Vehicle Tax on Non-Transport Vehicles

Motor Cycle: Most of the States have switched over to life time
tax (LTT) except a few in the North East Region (viz. Meghalaya,
Mizoram & Sikkim). As stated above, the basis for levying tax varies
across the States. In some States, it is levied on the basis of engine
capacity (e.g. Andhra Pradesh, Delhi, Himachal Pradesh, Punjab,
Rajasthan, Sikkim, and Tamil Nadu); while in other States it is levied
on the basis of the unladen weight (Assam, Bihar, Haryana, Madhya
Pradesh, Manipur, Meghalaya, Mizoram, Orissa, Tripura, Uttar
Pradesh and Uttarakhand) and cost of vehicle (Chhattisgarh, Goa,
Gujarat, Karnataka, Kerala, and Maharashtra). Jammu & Kashmir is
the only State in India where motor cycle is taxed on the basis of horse
power and tax is paid quarterly (Table 4.2). The detailed rate of road
tax on non-transport two-wheelers is presented in Annexure Table
A.4.3.
To see the variations in road tax paid per annum across the
States on motor cycle, the study has attempted an exercise where the
standard engine capacity, unladen weight and cost price is taken. It is
assumed that the life of a motor cycle is 10 years. Of the States where
the cubic capacity is used as the base for levying the tax, a motor cycle
owner in Andhra Pradesh pays the highest tax of Rs. 4,050 while the
least tax of Rs.1,000 is paid in Sikkim. Unladen weight of the motor
cycle is used as base in 11 States (Table 4.2). Of these the highest tax
is paid in Assam (Rs. 3,500) followed by Kerala (Rs. 2,700) and Orissa
(Rs. 2,000), while the lowest is the State of Haryana (Rs. 500). Few of
the States levy road tax directly on the basis of cost of the vehicle
purchased. Of these States, Karnataka pays the highest one-time tax
and Chhattisgarh the lowest. In the State of Jammu & Kashmir, the tax
generated for 10 years on the basis of horse power is Rs. 4,000.
Cars for personal Use: The bases used for levying road tax on
car for personnel use are cost of vehicle, unladen weight, and seating
capacity. In few of the States, it also levied on the basis of horse
power, cubic capacity, ownership and floor area (Table 4.3). In
majority of the States, road tax on cars for personal use is levied as
lifetime tax. In Jammu & Kashmir, tax on car is paid quarterly, while it
is paid annually in Meghalaya and Sikkim. A detailed structure of tax
levied on cars across the States is presented in Annexure A.4.5.
Table 4.3 presents the tax incidence assuming that the engine
capacity is 1000 cc, unladen weight is 1000 kg, cost price is Rs. 5 lakh,
floor area is up to 5 sq. mtrs., seating capacity is 5 persons excluding
driver and the car is diesel driven. Here, the life of the car is assumed

37

to be 10 years. It shows that though road tax is levied on cost of the

vehicle in most of the States, the base of classification for levying the
tax could be unladen weight, seating capacity, or the cost of the vehicle
itself. If the basis of classification is the cost of the vehicle and if we
assume the cost to be Rs.5 lakh, then the tax rates vary from 1 percent
to 8 percent of the cost of the vehicle. Accordingly, the least tax is paid
in the State of Haryana, while the highest is paid in State of Tamil
Nadu (Table 4.3).
Unladen weight is the base of classification in the States of
Andhra Pradesh, Madhya Pradesh, Uttar Pradesh and Uttarakhand,
where tax is levied on cost of vehicles. The rate of tax varies between 5
percent and 9 percent, if the unladen weight is 1000 kgs. In the State of
Kerala and Manipur, the tax is levied purely on the basis of unladen
weight. However, in Kerala, while the tax is payable every two years,
it is one time payment in Manipur. For the assumed life of the car of 10
years and unladen weight of 1,000 kgs, the higher tax is levied in
Manipur than in Kerala (Table 4.3).
Seating capacity is the base of classification in the State of
Bihar, Chhattisgarh, Orissa and West Bengal. In all these four States,
lifetime tax is paid on cars. In the States of Chhattisgarh and Orissa,
tax is levied on the basis of seating capacity and cost of the vehicle,
where tax rate is 5 percent if the seating capacity of the car is 5 persons
excluding driver. In Bihar and West Bengal, on the other hand, it is
levied only on the basis of seating capacity. And, if we take the
assumed seating capacity, the tax amount is quite high in West Bengal
as compared to Bihar (Table 4.3). In the States of Jammu & Kashmir
and Meghalaya, the basis of classification for levying tax on car for
personal use is horse power (HP). In Jammu & Kashmir, the tax is paid
quarterly at the rate of Rs.150 per quarter, while it is annual in
Meghalaya at the rate of Rs. 225 per annum. Assuming the capacity of
the car to be 14 HP and life of the car as 10 years, the tax paid in
Jammu & Kashmir is quite high (Table 4.3).
Cubic capacity (cc) is used as the basis of classification in the
States of Sikkim and Himachal Pradesh. In Himachal Pradesh, it is a
one-time tax and if the car has the engine capacity of 1000 cc then the
tax charged is 2.5 percent of the cost of vehicle. In Sikkim, on the other
hand, tax is paid annually at the rate of Rs. 12,00 per annum. In the
State of Tripura, the tax is levied on the basis of ownership, while it is
floor area of the car in Karnataka. If the assumed floor area is 5 sq.
mtrs., then the tax in Karnataka would be 12 percent of the cost of
vehicle.

38

Table 4.2: Road Tax on Motor Cycles in Indian States

(Motor Cycle with Engine Capacity 60 cc, ULW 95 kg, Cost Price Rs. 45,000)
Criteria of
States
Mode of Pay
Road Tax
Classification
Andhra Pradesh
Life time
Cubic Capacity
Rs. 4050 (9% of the cost)
Assam
15 year
Unladen Weight Rs.3500
Bihar
One Time
Unladen Weight Rs.1200
Chhattisgarh
Life time
Cost of Vehicle
Rs. 1800 (4% of cost)
Delhi
One Time
Cubic Capacity
Rs. 1220
Goa
Life time
Cost of Vehicle
Rs. 2250 (5% of cost)
Gujarat
One Time
Cost of Vehicle
Rs. 2700 (6% of cost)
Haryana
One Time
Unladen Weight Rs. 500
Himachal Pradesh One Time
Cubic Capacity
Rs. 1800 (4% of the cost)
Jammu & Kashmir Quarterly
Horse Power
Rs. 4000 (Rs. 100/-pq)
Karnataka
One Time
Cost of Vehicle
Rs. 3600 (8% of cost)
Kerala
One Time
Cost of Vehicle
Rs. 2700 (6% of cost)
MP
Life time
Unladen Weight Rs. 2250 (5% of cost)
Maharashtra
Life time
Cost of Vehicle
Rs. 3150 (7% of the cost)
Manipur
One Time
Unladen Weight Rs. 1125
Meghalaya
Annual
Unladen Weight Rs. 1000 (Rs. 100/pa)
Mizoram
Annual
Unladen Weight Rs. 1500 (Rs.150/pa)
Orissa
One Time
Unladen Weight Rs. 2000 (Rs. 200/-pa)
Punjab
One Time
Cubic Capacity
Rs. 1350 (3% of the cost)
Rajasthan
One Time
Cubic Capacity
Rs. 2250 (5% of cost)
Sikkim
Annual
Cubic Capacity
Rs. 1000 (Rs. 100/pa)
Tamil Nadu
Life time
Cubic Capacity
Rs. 3600 (8% of cost)
Tripura
One Time
Unladen Weight Rs. 1100
Uttar Pradesh
One Time
Unladen Weight Rs. 1600
Uttarakhand
One Time
Unladen Weight Rs. 1500
West Bengal
One Time
Cubic Capacity
Rs. 1560

Motor Vehicle Tax on Transport Vehicles

Passenger Vehicles: In the case of passenger transport vehicles
(e.g. stage or contract carriages) the seating capacity, the distance
covered and sometimes the type of route on which the vehicle is plying
forms the basis for levying tax. Motor vehicle taxation of passenger
buses is mainly on the basis of the seating capacity and treated
differently from motor cars and jeeps. Sometimes it is extended to
cover authorized standees as well (Delhi, Gujarat, Karnataka, and
Maharashtra). In many States, differentiation in tax treatment of
passenger buses is also accorded on the basis of type of service
(Ordinary/Luxury/Express etc). Some States, viz. Andhra Pradesh,
Chhattisgarh, Madhya Pradesh, Orissa also include the distance that the
vehicle is permitted to ply as an additional element for determining the
quantum of tax. There is another system also where routes are divided
into different categories in terms of region with a different rate of tax

39

Table 4.3: Road Tax on Motor Car (Personal) in Indian States

[with engine capacity 1000 cc, ULW 1000 kg, Cost Price Rs. 5 lakh, floor area upto 5 Sq. Mtrs,
Seating capacity 5 person excluding driver and 14 HP, for personal use (Diesel Driven)]
States
Andhra Pradesh
Assam

Mode of pay
Life Time
15 year

Base of Classification
Unladen Weight
Cost of Vehicle

Bihar
Chhattisgarh
Delhi
Goa
Gujarat
Haryana
Himachal Pradesh
Jammu & Kashmir
Karnataka
Kerala

One Time
Life Time
One Time
Life Time
Life Time
One Time
One Time
Quarterly
Life Time
Payable every 2
years
Life Time
One Time
One Time
Annual
One Time
One Time
One Time
Annual
Life Time
One Time
One Time
One Time
One Time

Seating Capacity
Seating Capacity
Cost of Vehicle
Cost of Vehicle
Cost of Vehicle
Cost of Vehicle
Cubic Capacity
Horse Power
Floor area
Unladen weight

MP
Maharashtra
Manipur
Meghalaya
Orissa
Punjab
Rajasthan
Sikkim
Tamil Nadu
Tripura
Uttar Pradesh
Uttarakhand
West Bengal

Unladen Weight
Cost of Vehicle
Unladen Weight
Horse Power
Seating Capacity
Cost of Vehicle
Cost of Vehicle
Cubic Capacity
Cost of vehicle
Ownership
Unladen Weight
Unladen Weight
Seating Capacity

Road Tax
Rs. 45,000 (9% of Cost)
Rs. 20,000 (4% of the
original cost.)
Rs. 3750
Rs. 25000 (5% of the cost)
Rs. 20,000 (4% of the cost)
Rs. 25000 (5% of the cost)
Rs. 30000 (6% of the cost)
Rs. 5000 (1% of the cost)
Rs. 12500 (2.5% of the cost)
Rs. 6000 (Rs. 150/- pq)
Rs. 60000 (12% of the cost)
Rs. 2150 (Rs. 430 every two
Year)
Rs. 25000 (5% of the cost)
Rs. 35000 (7% of the cost)
Rs. 2925
Rs. 2250 (Rs. 225/-pa)
Rs. 25000 (5% of the cost)
Rs. 10000 (2% of the cost)
Rs. 10000 (2% of the cost)
Rs. 12000 (Rs. 1200/-pa)
Rs. 40000 (8% of the cost)
Rs. 27501
Rs. 25000 (5% of the cost)
Rs. 25000 (5% of the cost)
Rs.9900/-

for each. This system is prevalent in Uttar Pradesh (based on regionrural versus urban). Another distinction peculiar to the taxation of
commercial passenger vehicles is that between stage carriages (with
fixed stopping points on specified routes) and contract carriages
(including taxis) hired on time or distance basis. The tax rates verify
from State to State, see Annexure Table A.4.7. In a majority of the
States tax is paid annually (viz. Assam, Bihar, Delhi, Gujarat, Haryana,
Himachal Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram,
Orissa, Punjab, Rajasthan, Sikkim, Tripura and West Bengal). In the
States of Andhra Pradesh, Chhattisgarh, Jammu & Kashmir,
Karnataka, Kerala, Tamil Nadu, Uttar Pradesh and Uttarakhand, the tax
is levied quarterly. Madhya Pradesh is the only State in India where

40

road tax on passenger vehicles is levied monthly. Table 4.4 presents

the annual road tax incidence on private stage carriages in Indian States
if the total distance permitted to be covered is 150 kms per day, ply on
routes other than town routes, cost of vehicle is Rs. 10 lakh, and is
permitted to carry 25 passengers. In a majority of the States, the basis
of classification is seating capacity of the vehicle, where it could be on
the basis of either per seat or lump sum seat. If the tax is levied on the
basis of per seat, the paid tax is as high as Rs.60,000 in Kerala
followed by Karnataka (Rs. 50,000), Orissa (Rs.18,700), Punjab (Rs.
16,250) etc. to as low as Rs. 1,775 in Maharashtra, assuming that the
seating capacity of the vehicle is 25 passengers. This huge difference is
due to the fact that Kerala and Karnataka charge Rs. 600 and Rs. 500
per seat, respectively, on a quarterly basis while Maharashtra charges
only Rs. 71 per seat annually. In Orissa, the rate per seat is only Rs.
172, however, there is also an additional tax of Rs. 576 adding which
the total tax per seat amounts to Rs. 748 per seat. If the tax is levied on
the basis of lump sum seating capacity, the tax paid is highest in
Jammu & Kashmir (Rs. 4,000) while the lowest is in Manipur (Rs.
1,720) (Table 4.4).
Distance covered is the basis of classification in the States of
Andhra Pradesh, Madhya Pradesh and Orissa where tax is levied
according to seating capacity. Accordingly, for the total distance of
150 kms in a day, the paid tax is highest in Madhya Pradesh (Rs.
63,000) followed by Orissa (Rs. 18,700) and Andhra Pradesh (Rs.
2,444). In Uttar Pradesh, tax on passenger vehicle is levied according
to type of route on which it is plying. For the A-class route, the
quarterly charge is Rs.590 for the first 20 seats and Rs. 35 for every
additional seat, if the seating capacity is more than 20 seats but less
than 35 seats. In Rajasthan, the basis of classification is the cost of the
vehicle. If the cost of the vehicle is Rs. 4 lakh, the annual tax rate is
0.70 percent of the cost of the vehicle with the special road tax of 1.5
percent of the cost of the vehicle.
Goods Vehicles: The terms heavy and light commercial
goods vehicles are defined in the Motor Vehicles Act, 1988, essentially
on the basis of weight. Goods vehicle are usually classified either
according to their unladen weight (ULW) or gross vehicle weight, also
called registered laden weight (GVW or RLW). Sometimes the
difference of these two, viz. payload, forms the basis of classification.
In principle, GVW is the right basis of taxation, as it reflects road
damage (given the number of axles and the weight distribution) the
best; further, this is usually linked to the engine capacity and size of

41

Table 4.4: Road Tax on Ordinary Private Stage Carriage in Indian States
(Total distance permitted to be covered 150 kms per day, ply on other than town routes, permitted
to carry 25 passengers)
States
Mode of
Road Tax (per annum)
pay
Andhra Pradesh
Quarterly Rs. 2,444.4 (Rs. Rs. 611.10/-per quarter)
Assam
Annual
Rs. 8000 (Rs.8000/- pa)
Bihar
Annual
Rs. 5000 (Rs. 200 per seat per annum)
Chhattisgarh
Quarterly Rs. 10000 (Rs 100/-pq)
Delhi
Annual
Rs. 3875 (Rs. 1915+ 280/- per passenger beyond 18 passenger)
Gujarat
Annual
Rs. 3480 (Rs. 1200+ Rs. 80 per seating + Rs. 40 per standing
beyond 9)
Haryana
Annual
Rs. 13750 (Rs. 550 per seat subject to a maximum of Rs. 35000)
Himachal Pradesh
Annual
Rs. 12500 (Rs. 500/- per seat per annual)
Jammu & Kashmir
Quarterly Rs. 4000 (Rs.1000/- pq)
Karnataka
Quarterly Rs. 50,000 (Rs. 500/- per seat pq + Rs.100/- per for every standing
passenger)
Kerala
Quarterly Rs. 60,000 (Rs. 600/-per seat pq)
Madhya Pradesh
Monthly Rs. 63,000 (Rs. 160/- per seat per month if does not exceed
100km, thereafter for each 10 km Rs. 10 per seat per month))
Maharashtra
Annual
Rs. 1,775 (Rs.71/- per seat per annum+ Rs. 18/- per standee per
annum)
Manipur
Annual
Rs. 1,720 (Rs. 1000 + 80 for every additional passenger beyond 16
passengers)
Meghalaya
Annual
Rs. 2500 (Rs. 100/- per seat per annum)
Mizoram
Annual
Rs. 2500 (Rs. 100/- per seat excluding two seats)
Orissa
Annual
Rs. 18700 (Rs. 172/- per seat per annum + Rs. 576/- per seat per
annum Addl. Tax)
Punjab
Annual
Rs. 16,250 (Rs. 650/- per seat per annum plus Special Road Tax
(SRT) 0.0518*Seat*KM*Day)
Rajasthan
Annual
Rs. 10000 (0.70% of the cost of the vehicle +SRT of 1.50% of the
cost of the vehicle or maximum Rs. 12000)
Sikkim
Annual
Rs. 3125 (Rs. 125/- per seat per year)
Tamil Nadu
Quarterly Rs. 50000 (Rs.400/per seat per quarter- plus 25% surcharge per
seat
Tripura
Annual
Rs. 1,375 (Rs. 425.00 for 8 plus Rs. 50.00 every seat beyond 8 and
upto 26)
Uttar Pradesh
Quarterly Rs. 3,060 (Rs. 590 for the first 20 seats and Rs. 35 for every
additional seat (A) class route)
Uttarakhand
Quarterly Rs. 3,060 (Rs. 590 for the first 20 seats and Rs. 35 for every
additional seat (A) class route)
West Bengal
Annual
Rs.3125/-p.a. (Rs.125 per passenger per annum)

the vehicle. The state-wise road tax structure for trucks and trailers is presented
in Annexure Table A.4.6.
gross

The basis of classification for goods vehicles in a majority of States is

vehicle weight. It is unladen weight in the States of

42

Table 4.5: Road Tax on Goods Carriages in Indian States

[with Laden Weight or Gross Vehicle Weight 10,000 kg (10 M.T.), Carrying Capacity 8,000 kg
(8 MT), and Cost Price Rs. 10 lakhs]
A. Pradesh

Mode of
pay
Quarterly

Base of
Classification
Laden weight

Rs. 9,748.2 (Rs. 2437.05/-pq)

Assam

Annual

Carrying Capacity

Rs. 7,000 (Rs.3500.00+Rs.700.00 for every additional 1 M.T)

Bihar
Chhattis

Annual
Quarterly

Gross Vehicle weight

Gross Vehicle weight

States

Road Tax (per annum)

Delhi

Annual

Gross Vehicle weight

Rs. 5500 (Rs. 500/- per tone +10% additional tax )

Rs. 2,400 (Rs. 300/- every three month upto 2,000 kg + Rs. 75/pa
for addl 500 kg)
Rs. 3,320

Goa

Annual

Gross Vehicle weight

Rs.4,900

Gujarat

Annual

Gross Vehicle weight

Haryana

Annual

Gross Vehicle weight

Rs. 6,550 (Rs. 2000+650 per every 1000 kg or part thereof

exceeding 3000 kgs)
Rs. 2,400

H. Pradesh

Annual

Loading Capacity

Rs. 2,000

J &K

Quarterly

Laden weight

Rs. 4,400 (Rs. 1100/-pq)

Karnataka

Quarterly

Laden weight

Rs. 7,200 (Rs. 1800/-pq)

Kerala

Quarter

Gross Vehicle weight

Rs. 8,360 (Rs. 2090/-pq)

M Pradesh

Quarter

Laden weight

Rs. 8,400 (Rs. 2100/-pq)

Maharashtr
a
Manipur

Annual

Laden weight

Rs.7,500/-pa

Annual

Gross Vehicle weight

Rs.3,280/-pa

Meghalaya

Annual

Carrying Capacity

Mizoram

Annual

C Capacity /ULW

Rs. 3,120 (Rs. 600 plus Rs. 180 for every additional 1/2 metric
tonne or part thereof authorised load of goods after one tone )
Rs. 3,710 (Rs. 840 + Rs.410/- per tonne above one tonne)

Nagaland

Annual

Loading Capacity

Rs.2,410 (Rs. 450 for 1 MT and Rs.140 every additional MT)

Orissa

Annual

Laden weight

Rs. 4,955 (Rs. 3,773 + Rs. 1,182 Addl. Tax)

Punjab

Annual

Gross Vehicle weight

Rajasthan

Annual

Cost of
Chassis/Vehicle

Sikkim

Annual

Gross Vehicle weight

Tamil
Nadu
Tripura

Quarter

Laden weight

Rs. 3,410 (Rs. 2,000/- per annum plus SRT Rs. 1,410/- per
annum)
Rs. 13,350 (Rs. 4,500/- + 0.95 % of the cost of Vehicle exceeding
Rs. 6 lakhs + SRT (3,050 + 0.5% of cost of Vehicle exceeding Rs.
6 lakhs)
Rs. 4,033 (Rs. 3,241/- plus Rs. 99/- for every additional 250 kgs
or part thereof above 8,000 kgs.)
Rs. 7,600 (Rs. 1900/- pq)

Annual

Laden weight

Rs.2,100.00

U Pradesh
Uttarakhan
d
West
Bengal

Quarter
Quarter

Gross Vehicle weight

Gross Vehicle weight

Rs. 3,400 (85.00 per MT of GVW or part thereof)

Rs. 3400 (85.00 per MT of GVW or part thereof)

Annual

Gross Vehicle weight

Rs. 3700/-

Assam, Himachal Pradesh, Meghalaya, Nagaland, while it is cost of

chassis/ vehicle in the State of Rajasthan and unladen weight in
Mizoram (Table 4.5). In most of the States, the tax is paid annually
while in a few it is paid on a quarterly basis.
To calculate the tax incidence on goods vehicles, Table 4.5
assumes laden or gross vehicle weight of a vehicle as 10,000 kgs,
carrying capacity as 8,000 kgs., and cost price as Rs.10 lakhs. In the
State where the base of classification is GLW, the highest annual tax

43

paid is Rs. 9,748 (Andhra Pradesh) while the lowest is Rs.2,100

(Tripura). If the payload (or carrying capacity) is the base for levying
the tax, Assam levies the highest tax (Rs. 7,000) while lowest levy is in
Himachal Pradesh (Rs. 2,000) for a carrying capacity of the vehicle of
8,000 kgs. Mizoram and Rajasthan are the only States where tax is
levied on the basis of unladen weight and cost of chassis/ vehicle,
respectively. The annual tax paid is Rs. 3,710 in Mizoram and Rs.
13,350 in Rajasthan (Table 4.5).
Multiple Axle Vehicles: Some of the States like Andhra Pradesh
and Kerala in particular have attempted to put differential rates of
motor vehicle taxation favoring multiple axle vehicles over
conventional heavy vehicles/trailers in the same size class in terms of
gross vehicle weight. For instance, in Andhra Pradesh, the motor
vehicle taxation on multi axle goods vehicle is 25% less than what is
applicable to conventional double axle goods vehicles.
Taxes on transport vehicles plying on inter State routes:
Passenger buses (SRTU or private) plying on inter State routes covered
by an inter-state agreement are subject to MVT only in their State
(State of registration). However, buses (SRTUs or private) plying on
inter State routes not covered by the agreement are subject to MVT in
both the States. The inter se tax structure between goods and passenger
vehicles indicates that light passenger vehicles (personal and
commercial cabs) are taxed at a lower rate as compared to light goods
vehicles, but rates on medium and heavy vehicles are much higher for
passenger than goods vehicles.
Registration Fee
Vehicle registration is compulsory to drive a motor vehicle. No
owner of a vehicle can allow or permit the use of an unregistered
vehicle. Vehicle is registered with the Regional Transport Officer
(RTO). There are three types of registration with RTO, viz. temporary
registration, registration of new vehicle, and registration of vehicle
arriving from out of State or assignment of a new registration mark
(R.M.A)
Temporary Registration: To take a vehicle from the dealer's
premises requires a temporary registration. In the case of non-transport
vehicles, to take the vehicle to the place of registration from the
dealer's premises it needs to be registered temporarily. In the case of a
transport vehicle, one needs time to construct the body of the vehicle
over the chassis; hence it needs a temporary registration. Temporary
registration is valid for 7 days initially and can be extended up to 30
days in case of non transport vehicles. The validity can be extended for

44

a longer period with the permission of the registering authority in the

case of transport vehicles. An application for temporary registration
has to be made.
Permanent Registration of New Vehicle: To apply for the
permanent registration of a new vehicle, it should be produced to the
RTO for inspection. The vehicle is inspected by an inspector who
confirms that it conforms to the provisions of Act & Rules and then the
vehicle tax is levied.
Registration of vehicle that arrived from out state for
assignment of new registration mark (R.M.A): If the vehicle is
registered in one State and is kept or used in another State for a period
of more than a year, then the vehicle needs to be registered in the latter
State for a new registration number to be assigned. Rate of registration
fees varies from one State to another as set out in Annexure A.4.1.
Registration Fee Structure: The fee rates for temporary
registration of vehicles vary across States. For registration of motor
cycle, for example, the rate is as low as just Rs. 20 in Bihar to as high
as Rs. 100 in West Bengal. In other States, the fee is in the range of Rs.
20 to Rs. 50. In case of personalized 4 wheelers also, the fee for
temporary registration is only Rs. 20 in Bihar but is Rs. 250 in Goa.
The temporary registration fee for passenger and goods vehicles is
almost the same in all the States, varying from Rs.300 to Rs. 800. The
imported motor vehicle is also liable for temporary registration. The
rates for permanent registration of motor cycles in India vary between
Rs.60 and Rs. 260, while it is between Rs. 130 to Rs. 400 for the small
vehicles. The registration fee for passengers and goods vehicle is least
in the State of Haryana and Tamil Nadu (at Rs. 300), while it is highest
in Madhya Pradesh (at Rs. 800). For the imported vehicles- Delhi,
Mizoram, Punjab and Uttar Pradesh charge Rs. 800 as the registration
fee, whereas Tamil Nadu charges only Rs. 100. The fee for the
registration of a vehicle that arrived from out of State also varies across
the States and across the vehicles, as given in annexure Table.
Transfer of ownership
State government also charges for transfer of the ownership of
the motor vehicle. The fee rates are mostly half of the registration fee
in all the States (Annexure A.4.1)
Fitness Certificate
For every transport and non-transport vehicle in India, it is
mandatory to obtain a fitness certificate. For private vehicles, fitness is
granted for 15 years initially at the time of the registration and then

45

fitness of the vehicle is renewed for the next five years. Every
commercial vehicle has to obtain this certificate after two years for
new vehicles and after every one year for old vehicles. In India, the
fitness certification is being carried out by the motor vehicle
inspectorate, known as the Regional Transport Offices (RTOs)
attached to the Transport Department in each State and has its offices
in the Capital as well as in the major cities of the State.
Fitness certificate fee (FCF) depends on the category of the
vehicle and vary across States. Table 4.6 presents the fee structure for
fitness certificate for light, medium and heavy vehicles. The FCF for
all three categories of vehicle is highest in the State of Madhya Pradesh
while it is the lowest in the State of Tamil Nadu. In the State of Bihar,
the FCF for heavy motor vehicle is levied on the basis of the seating
capacity and load capacity of the vehicle.
Taxes on the Operation of Vehicles
Taxes on the use of vehicles include custom duty on imported
petroleum and union excise duty on motor spirit and high speed diesel
(HSD) levied by the Central Government. The CenVAT on motor
spirit and HSD is levied at the rate of Rs.15.50 and Rs. 4.60 per litre,
respectively. Import duty, on the other hand, is levied at the rate of 7.5
percent. Also, education cess is leviable at the rate of 2 percent over
and above both custom duty and CenVAT rates.
State VAT on fuel (motor spirit) and lubricants is levied by the
States. There is variation in VAT rates as given in Table 4.7. State
government also levies VAT on spares. Andhra Pradesh levies the
highest sales tax of 33 percent on petrol in the country, followed by
Tamil Nadu, where it is 30 percent. Kerala, which levies 29 percent
VAT on petrol, has the highest sales tax rate for diesel at 24.69
percent. Haryana and Punjab have the lowest rates of diesel at 8.8
percent.
Passenger and Goods Tax
The passengers and goods tax is levied on passengers and
goods carried by road or by inland waterways. Both the motor vehicles
tax and passengers and goods tax are similar in nature. In fact, these
are treated as user charges or charge for construction and maintenance
of roads. These taxes fall on the same base and are paid ultimately by
the same group of people. Some of the States levy both these taxes
while others have merged the two and levy a single tax. Bihar, Delhi,
Karnataka, Orissa, Rajasthan, Tamil Nadu and West Bengal, as shown

46

Table 4.6: Fees for Fitness Certificate in Indian States

State

Andhra Pradesh

Fitness
Certificate fee
for Light motor
vehicle
(Rs.)
200

Fitness
Certificate
fee for
Medium
vehicle
(Rs.)
300

Bihar

Delhi
Goa
Himachal Pradesh
Kerala
Madhya Pradesh
Maharashtra
Mizoram
Nagaland
Orissa
Tamil Nadu
Uttar Pradesh
Uttaranchal
West Bengal

300
200
200
200
400
200
200
200
200
50
200
200
200

400
300
300
300
450
300
300
300
300
100
300
300
300

(In Rs.)
Fitness Certificate fee for
Heavy vehicle
(Rs.)

400
Seating Capacity between
12 to 22 seats: Rs.100/- and
Seating Capacity more than
22 seats: Rs.150/-, Load
Capacity
770-1500kgs:
Rs.50/-, Load Capacity
1501-3000 kgs: Rs. 100/-,
Load Capacity more than
3000 kgs: Rs.150/500
400
400
400
500
400
400
400
400
150
400
400
400

in Table 4.8, do not levy this tax. The states that levy this tax have two
different systems to follow. First category of the States levy tax on
actual collection of fare and freight. In Haryana, for example, the
passenger tax is levied at the rate of 25% of the value of fare; Manipur
at the rate of 10% of the fare charged, and in Himachal Pradesh it is
40% of the fare. The second category of the States levies a composite
tax. That is, the tax is a compounded levy based on the criteria of
seating capacity, occupancy ratio etc. In some states the tax is collected
as per cent of the purchase price of the vehicle. The states following
the system of lump sum tax are Haryana (for smaller vehicles),
Meghalaya, and Mizoram. Manipur gives the option to the owners of

47

Table 4.7: Taxes on Fuel at the Centre and States Level

(in Percent)

State

Import Duty

Union Excise Duty

VAT Rates

HSD
(in Rs. per
litre)
4.60

Petro
l

HSD

7.5

Petrol
(in Rs. per
litre)
15.50

33

7.5

7.5

15.50

4.60

25.75

22.2
5
15.5

Bihar

7.5

7.5

15.50

4.60

24.5

Chhattishgarh

7.5

7.5

15.50

4.60

22

18.3
6
22

Delhi

7.5

7.5

15.50

4.60

48

20

Goa

7.5

7.5

15.50

4.60

18

19

Gujarat

7.5

7.5

15.50

4.60

NA

21

Haryana

7.5

7.5

15.50

4.60

20

8.8

Himachal Pradesh

7.5

7.5

15.50

4.60

25

14

Jammu &
Kashmir
Jharkhand

7.5

7.5

15.50

4.60

NA

NA

7.5

7.5

15.50

4.60

20

14.4

Karnataka

7.5

7.5

15.50

4.60

25

NA

Kerala

7.5

7.5

15.50

4.60

29

Madhya Pradesh

7.5

7.5

15.50

4.60

28.75

24.6
9
23

Petro
l

HSD

Andhra Pradesh

7.5

Assam

Maharashtra

7.5

7.5

15.50

4.60

NA

23

Manipur

7.5

7.5

15.50

4.60

20

NA

Meghalaya

7.5

7.5

15.50

4.60

NA

NA

Orissa

7.5

7.5

15.50

4.60

18

18

Pondicherry

7.5

7.5

15.50

4.60

12.5

12.5

Punjab

7.5

7.5

15.50

4.60

27.5

8.8

Rajasthan

7.5

7.5

15.50

4.60

28

18

Tamil Nadu

7.5

7.5

15.50

4.60

30

21.4
3
12.5

Tripura

7.5

7.5

15.50

4.60

20

Uttar Pradesh

7.5

7.5

15.50

4.60

23.62

Uttarakhand

7.5

7.5

15.50

4.60

NA

16.1
6
21

West Bengal

7.5

7.5

15.50

4.60

NA

NA

Notes: Education cess is levied at the rate of 2% over and above both import duty and union excise duty.
NA= Not available.

48

of vehicles to pay according to ad valorem rates or follow the

compounding scheme.
In regard to goods tax also different methods of levy are
followed. In States like Himachal Pradesh the tax is levied at the rate
of 5% of the freight charged; and Manipur levies 10% of the freight
charged (with the option for compounded levy). The rest of the states
follow the system of compounded levy. Haryana, for example, levies a
lump sum tax varying from Rs. 1200 to 14,400 per annum. Manipur
levies lump sum tax on the basis of the type of vehicle (with reference
to movement with in the state or inter-state); Megalya also follows the
system similar to Manipur; and Mizoram follows the system of age of
vehicle to fix the compounded tax.
Rajasthan has introduced a special road tax in lieu of
passengers and goods tax. It is also levied on all transport vehicles. In
case of goods vehicle registered with the state the tax is levied
primarily according to the cost of purchase of vehicle and in the case of
passenger vehicles the tax is based on both the cost and the seating
capacity. For the vehicles registered outside the state, for the goods
vehicles the tax is levied on the basis of load carrying capacity and for
the passenger vehicles it is on the basis of seating capacity.
It is felt that in the states where the tax is collected on the basis
of actual passengers carried or goods transported, the tax official gets
the power to determine tax and thus the interaction of the officials and
transporters increases. In most cases they connive to have a reduced
tax to be levied on the vehicles.
Some of the States, in addition to this tax, levy surcharge on
this tax. Himachal Pradesh levies a surcharge of 20% on passenger tax.
The rates of this tax (Table 4.8) indicate considerable variation. It
varies according to the nature and use of vehicles. The justification of
levy of these taxes also lies in the cost recovery of provision of
infrastructure -- the roads. However, as per the definition of tax in the
Acts, it is levied on the use of motor vehicles. The tax is known as road
tax and regarded as the price charged by the States for the services
provided by them. Even in practice, a major proportion of the tax is
earmarked by the States for the construction and maintenance of roads
in the State concerned.
Octroi
Octroi is yet another tax that affects the road transport sector. It
yields substantial revenue in six major States. The tax is generally

49

Table 4.8: Goods and Passenger Tax in Indian States

States
Gujarat

Haryana

Himachal
Pradesh
Manipur

Tax Structure
The passenger tax is based on revenue collection of fare and is levied from Gujarat State Road Transport Corporation,
Ahmedabad Municipal Transport Services, State carriages of State Transport Operators of neighbouring states under
reciprocal agreement and other municipal corporations/municipalities running state carriage buses.

The passenger tax is 1% of the amount of fare collected for municipal areas and

17.5% for the area outside the municipal areas.

Under the Punjab Passengers and Goods Taxation Act, 1952, as applicable to the State of Haryana,

Tax @ 25% of the value of the fare is charged on passengers carried by a motor vehicle,

Lump sum rates of tax varying from Rs.6000/- to Rs.16000/- per month have been fixed for permit holders
on link routes.

Lump sum amount varying from Rs.1200/- to Rs.14400/- per annum is payable by smaller passengers
vehicles.
Goods Tax: 5% of the freight (w.e.f. 15.10.1994)
Passenger Tax: 40% of the fare (w.e.f. 15.10.1994) and @20% Surcharge on Passenger Tax (w.e.f. 14.11.77)
Manipur State fixes lump sum taxes at rate specified in section 4 of the Manipur Passengers and Goods Taxation Act
1977 (Act 1 of 1978) read with Rule (ii) of the Manipur Passengers and Goods Taxation Rules, 1979. The taxes are in
lieu of tax chargeable on fare and freight on return basis in respect of various types of vehicles. The owners of the
motors vehicles (under hire & reward) have the option of paying lump sum tax in advance in equal quarterly
instalments (January-March, April-June, July-September and October-December ) payable on or before the last working
day of March, June, September and December respectively. Over and above this, the owner of the motor vehicles
(under hire & reward) have the option of either (a) to pay 10 paisa per rupee value chargeable on passenger and goods
vehicles on return basis or (b) to pay lump sum taxes as fixed earlier. Various types of vehicles and their present rates
are summarized as follows:A. Passenger Vehicle
Sl.No.
Type of Vehicle
Rate per annum
Quarterly
1. Inner State Bus
Rs.3000.00
Rs.750.00
2. Inner State Medium Bus
Rs.2200.00
Rs.550.00
3. Inner State Mini Bus
Rs.1500.00 Rs.375.00
4. Bus (>34 seats)
Rs.2200.00
Rs.550.00
5. Medium Bus (>23 seats <34) Rs.1580.00
Rs.395.00
6. Mini Bus (>12 seats <23) Rs. 960.00 Rs.240.00
7. Jeep Taxi (maxi cab)
Rs. 960.00 Rs.240.00
8. Jeep Taxi (<12 seats & other taxis)Rs. 800.00
Rs.200.00
9. Tempo
Rs. 500.00 Rs.125.00
10. Auto Rickshaw
Rs. 300.00 Rs. 75.00
B. Goods Vehicle
Sl.No.
Type of Vehicle
Rate per annum
Quarterly
1.
1 ton
Rs. 500.00
Rs.125.00
2.
3 ton
Rs.1100.00
Rs.275.00
3.
5 ton
Rs.1500.00
Rs.375.00
4.
7.5 ton
Rs.2300.00
Rs.575.00
5.
9 ton
Rs.2700.00
Rs.675.00
6.
10 ton
Rs.3000.00
Rs.750.00
7.
Above 10 ton
Rs. 200.00 for every addl. ton.

Meghalaya

Under the Meghalaya Passengers and Goods Taxation Act, the tax is levied on all fares and freights charged for
carriage of passengers or goods by public vehicles including Taxis, City Buses, Steamers & Boats within the State as
under : - (1) Owners of the under noted classes of taxable vehicles are liable to pay lumpsum at the rate specified
against each class of taxable vehicles in lieu of the tax chargeable on fare and freight on application made by each to
the Assessing Authority of the area, and (2) willing owners of the stage carriages, city buses and bazar bus may pay
lumpsum at the rate specified against each class noted below in lieu of the tax chargeable on fare and freight on
application made by each to the Assessing Authority of the area.
Rates:- The prevailing rates of passengers and goods tax (effective with effect 25th, April, 2003 are as follows :Goods Tax
Class of vehicles
Upto 5 tonnes
Above 5 tonnes but
Above 9 tonnes
(pay load)
upto 9 tonnes
(pay Load)
Ann
Per
ual
Pediem
Annual
Perdiem
Annual
diem
A. Motor vehicles for the transport of
goods on hire
1
For vehicles plying in Inter State routes
except those operating between
Meghalaya on the one hand and

50

Tripura, Manipur, Nagaland Arunachal

Pradesh Bhutan, Assam or Mizoram on
the Other
i) For vehicles comple ted not more than
12 years of existence following
registration
ii) For vehicles com pleted more than 12
years of existence following registration
2
For vehicles plying wholly within the
State of Meghalaya but not confined to
a single district and those between
Meghalaya on the one hand and
Tripura, Manipur, Nagaland Arunachal
Pradesh, Bhutan, Assam or Mizoram on
the other
i) For vehicle completed not more than 12
years of existence following registration
ii) For vehicles completed more than 12
years of existence following registration
3(a) For vehicle plying only in single Hills
District and also
vehicle plying
exclusive within one more Hill District
but not passing through any plain
i) For vehicles Completed not more than
12
years of existence following
registration
ii) For vehicles completed more than 12
years of existence following registration
3(b) For vehicles plying only on plain
District (includes vehicles plying
between a Hills District and adjacent
plains District also)
i) For vehicles completed more than 12
years of existence following registration
ii) For vehicles completed more than 12
years of existence following registration
Passenger Tax

38
28

25

6023

41

6568

44

36
14

25

5578

41

6072

44

3911

17

5792

26

6534

30

3680

18

5380

26

6056

30

3680

17

4703

20

5710

26

3482

17

4390

20

5314

26

3911

18

5033

24

6172

28

3762

18

4703

24

5710

28

Class of vehicles for

Inter State
Annual
2

Orissa

Rajasthan

Perdiem
3

Inter District
Annual
4

Perdiem
1
5
B.
Motor vehicles for transport
of passengers on hire(a)
Motor cabs and three wheelers
only
i) Carrying capacity not more 496.00per
413.00 per 2.40
per
than 4 Passengers
passengers
5.00 per passengers
passengers
passengers
ii) Carrying capacity more than 4 496.00
per
413.00 per 4.00
per
passengers
passengers
5.00 per passengers
passengers
passengers
C.
State carriage and city buses
Rate of Tax
a) Operating on permit with route length not Rs.418.00 per passenger per annum
exceeding 40 Kilometres
b) Operating on permit with route length exceeding 40 Rs.247.00 per passenger per annum or Rs.6568.00
Kilometres
per annum whichever is lower
c) Bazar buses
Rs. 89.00 per passenger per annum
There is no such provision under Orissa Motor Vehicle Taxation Act for levy of Taxes on passengers and goods, entry
tax, road toll etc. Taxes for vehicles coming from other States to ply temporarily in the State of Orissa are being
realized at border check gates.
Special Road Tax (In lieu of Tax on Passengers and Goods):
In addition to the Motor Vehicle Tax levied under section 4 of The Rajasthan Motor Vehicle Taxation Act, 1951,
Special Road Tax is also levied on all kinds of transport vehicles. In case of goods carriers registered in the State, the
tax is based on the cost of chassis/vehicle, whereas for passenger vehicles registered in the State, the tax is broadly
based on the cost of vehicle/chassis and its seating capacity. In case of vehicles registered outside the State, the tax is
based on the basis of load carrying capacity for goods vehicles and on the basis of seating capacity for the passenger
vehicles.

51

based on quantity or weight (specific tax) or sometimes, the value of

the commodity (ad valorem tax) entering a local area. It is assessed and
collected at the point of entry by stopping the vehicle. However, the
tax being mostly specific, there are many rate categories. The point of
assessment and collection being the entry point of a local area, it
causes arbitrariness in assessment and delays in transportation. It also
encourages corruption. However, the tax is now levied only in 16
municipal corporations of Maharashtra; in all other States the tax has
been abolished.
Some of the States levy entry tax as a substitute to octroi. This
is an account-based levy collected as a percent of the turnover. The
yield from entry tax has shown much higher growth than the sales tax
revenue of the State. In Karnataka, for example, the revenue from
sales tax increased at the rate of 20 percent while the yield from the
entry tax increased by 35 percent approximately during the period
when entry tax was levied in place of octroi. The growth of entry tax in
Madhya Pradesh has also been impressive. States like Uttar Pradesh
and Rajasthan have substituted octroi by levying a surcharge on sales
tax. In the context of motor vehicles tax, the entry tax is levied only to
have the rate of motor vehicles tax equal to that in the other State from
where a vehicle has come for registration. Otherwise there is no entry
tax.
Driving licenses
Driving License is an official document certifying that the
holder is qualified to drive a motor vehicle. Under the provisions of the
Motor Vehicles Act, 1988, in India, no person can drive a motor
vehicle in any public place unless he holds a valid Driving License
issued to him, authorizing him to drive a vehicle of that particular
category. There are different types of licenses issued by the RTO
offices (chapter 8). These include learner driving license, permanent
driving license, duplicate driving license, international driving license,
motorcycle license or two-wheeler license, light motor vehicle license
(lmv), heavy motor vehicle license (hmv). Fee rates vary from one
State to another as given in the Table 4.9.
Permit for Movement of Vehicles
The control of transport vehicles is governed by Central Motor
Vehicles Act, 1988, and Central Motor Vehicles Rules, 1989. The
movement of goods carriages / trucks is carried out with its registration
with the State Road Transport Authorities in each State by charging
registration fee, road tax etc.

52

Permit is issued by a State or Regional Transport Authority for the use

of a motor vehicle as a transport vehicle under Section 66 of Motor
Vehicles Act, 1988. However, vehicles belonging to Central or State
Government, police, local body, ambulance, cranes and goods vehicle
having gross vehicle weight not exceeding 3000 kilograms are
exempted from obtaining the necessary permit.
Intra-state movement of vehicles within the State or interstate
movement of vehicles is governed by a permit. Permit is issued
initially five years with an annual renewal fee. In case the transport
vehicle / goods carriage wants to operate in the neighbouring State then
it can have a counter-signed permit by paying permit fee for a year to
the State Road Transport Authority in which the vehicle is registered2.
Type of Permits:
Various permits for a variety of uses are issued for plying
vehicles in different parts of the country (Annexure A.4.2). The
following are the main types of permits issued:
Permit for Passengers Vehicles also known as stage carriage
permit is granted to a passenger vehicle (mini or full body bus) for
operation on hire or reward for a particular route on stage to stage basis
in accordance with section 72 of the Motor Vehicles Act, 1988.
Contract carriage permit is granted under section 74 of the
Motor Vehicles Act to a motor vehicle which carries a passenger or
passengers for hire or reward and is engaged under a contract. Contract
carriage permits in the State are, however, being issued to three
wheeler auto-rickshaws, taxis and maxi-cab vehicles having maximum
seating capacity of 9 passengers excluding the driver.
Private Service vehicle permit is granted to a firm/company for
carrying their staff in connection with his trade or business in
accordance with section 76 of the Act. These permits are also being
issued to educational institutional buses.
Local Goods Permits for goods vehicles are granted to the
vehicles operating within States. Permits granted to a particular vehicle
for carrying load has to be applied for that particular area only.
Inter-State Goods Permits are granted to the vehicle to carry

For instance, a transport vehicle registered in Delhi State wants to transport goods
in the neighbouring State of Uttar Pradesh; then Delhi State will collect permit fee on
behalf of Uttar Pradesh and issue a counter signed permit for its movement between
Delhi and U.P.

53

Table 4.9: Driving License Fee Structure in Indian States

Learner Driving
License

Permanent
driving
license fees
in Rupee

Permanent
driving
license (in
laminated
card)

Interna
tional
Driving
License

Dupli
cate
Drivi
ng
Licen
se

Andhra
Pradesh
Bihar

30 for all class

40

200

500

200

Rs. 55/- for Motor-cycle or

scooter or LMV, Rs. 95/- for
HMV, Rs. 95/- for Motorcycle/ Scooter + LMV, Rs.
55/- for all other types of
vehicles + 95/- per extra
vehicle type

Delhi

Rs. 30/- for one category

and Rs. 30/- for each
additional category

Rs. 120/- for

Motor-cycle or
scooter or LMV
or HMV, Rs.
95/- for HMV,
Rs. 220/- for
Motor-cycle/
Scooter
and
LMV, Rs. 220/for all other
types
of
vehicles
+
120/- per extra
Test fee of Rs.
50/- for each
category plus
Rs.200/-

Type of
License

State

Goa
Haryana
Himachal
Pradesh

30
30

40
200

30

40

Karnataka

30

40
40 (book form)
+
30
for
addition class

Kerala
Manipur
Mizoram

30
30

40
30

Nagaland

30

40

Orissa

30

40

Punjab
Tamil
Nadu
Uttar
Pradesh
Uttarancha
l
West
Bengal
30
NA: Not Available

30

40

15

50

NA

60-

Rs.500/-

Rs.
250/includi
ng cost
of
Smart
Card

200

215

500
Rs. 200
500

15/-

50
200

500

215
200
(computerized
chip) + 200 for
addition class
150
250

Renew
al of
Drivin
g
Licens
e

200
200
15 or
150

50
50 or 215
if licence
issued
elsewher
e
50 (BF)
and 200
(CC)
30
200

150
150 + 30 for
additional class
200+ 30 for
another class

200

200

25

50 or 150

60

200

55

55

500

50

50

50

50

50

50

30

40

200

30

40

200

40

220

500

500

150 or 30
40 or 150

54

goods from one State to another subject to meeting the respective tax
liabilities with the concerned State and any other norms.
Countersignature Permits for Goods are the permits which are
initially issued by one State and later on endorsed in another State by
the concerned State Transport Authority.
Temporary permit is issued by the concerned Secretary, RTA,
under section 87 of the Motor Vehicles Act, 1988, for a limited period,
enabling the vehicle to go outside the State for the conveyance of
passengers on special occasions such as fairs and religious gatherings,
or for the purposes of a seasonal business, or to meet a particular
temporary need.
The above analysis indicates that apart from a variety of
permits for different purposes, there are two broad categories, namely
(i) counter-signature permits and permit under reciprocal agreements,
and (ii) the national permit for movement between home State and
three or more other States. In the case of counter-signature permit, the
operator is required to pay the tax of the home State as well as the tax
of other State.
In view of the fact that inter-state movement should be hassle
free, provision has been made for a National Permit for those vehicles
that need to travel across the country.
National Permit System
While, the cargo movement by road requires long distance
trunk route operations, in order to facilitate interstate movement, the
Government has provisioned for a Scheme through which a transport
vehicle/ goods carriage/ truck can avail of the facility of acquiring a
National Permit. Such a permit is issued to vehicles for a minimum of
four contiguous States (including the home State). The single National
Permit is issued for a new vehicle for 12 years for two axle truck and
15 years for multi-axle truck. For obtaining such permits, the
maximum age of a particular vehicle should not exceed 12 years.
However, maximum age in case of a multi-axle vehicle should not
exceed 15 years. For the issue of National Permit, applicant has to
apply on Form 46 and 48 along with other formalities.
Transitory System of National Permit: The system of National
Permit that existed until 7th May 2010 was based on the premises that
the transporter must pay tax to the State of registration and also to the
States being travelled by him. He would pay the tax of the home State
and provide for demand drafts at the rate of composite tax of each
other State included in his permit.

55

This system has been in vogue for quite some time. It was,
however, felt that since payment of the tax of other States was paid
through demand draft in the home State, there used to be considerable
delay in forwarding demand drafts to the concerned States. This
created problems of revalidation of drafts resulting in arrears of
revenue due to non-realisation of drafts in time.
In this system, the National Permit was being issued by paying
authorisation fee of Rs.5000 per annum per State and Rs.2500/- per
annum per Union Territory3. In this case, the Central Motor Vehicle
Rules specify that a transport vehicle will have to take permit for a
minimum of three States / Union Territory contiguous to each other
with basic registration of such transport vehicle in its home State. For
instance, a transport vehicle / truck registered with Haryana Road
Transport Authority can opt for three contiguous neighbouring States
like Delhi, U.P., Chandigarh (U.T) and pay per annum the
authorisation fee of Rs.2500/- for Delhi, Rs.5000/- for U.P., and
Rs.2500/- for Chandigarh i.e. a total of Rs.10,000/- per annum to
acquire a National Permit for Home State plus three States / UT.
Normally, a trucker operating on a trunk route opts for Home
State and a maximum of four States by paying authorisation fee per
annum of Rs.5000/- per State. Hence, the fees per annum do not
exceed Rs.20,000/- per annum per vehicle. At present, these transport
related fees constitute 2.5% or less of the total annual fixed and
variable cost of a trucker. Therefore, at present any individual or a firm
can have unlimited number of vehicles and unlimited number of single
national permit for each vehicle for its transportation of cargo for the
States it has chosen to move within4.
Since 1980, a single National Permit to operate in as many
States as a truck operator required was available by paying
authorisation fee of Rs.5000/- per State, with a minimum of three
States. The National Permit was issued at a single window to the truck
operator from the State where his truck is initially registered.
This exercise used to be over within a day of putting in the
relevant application under the Central Motor Vehicles Rules, 1989, to
3
Transport Development Council recommended that UTs and smaller States other
than the home State, on a uniform basis. In practice, this recommendation is not
being strictly followed by all the States.
4
Till 1980, the National Permit scheme was limited with the rider that an individual
or a firm can not have more than five / ten national permits. Prior to this, there used
to be the practice of issuing zonal permits for East, West, North or South Zones.
Even prior to this, there used to be only inter-State counter signed permits or intraState permit under the Central Motor Vehicles Act, 1936.

56

the transport department and by and large, the truckers do not have any
serious complaint about the procedure of issuance of National Permit
for three or more number of States. Generally, out of the total number
of trucks operating under the National Permit scheme, 40% take
authorisation for home State plus three States, 20% take permit for four
States, another 20% take permit for five States, 15% take permit for six
States and only 5% or so opt for more than 6 States.
The common grouse of the truck operators had been that the
enforcement agencies of most State Governments were invariably
challenging the validity of the National Permit issued to a trucker and
were harassing them to extract legal or illegal revenue by detaining
trucks at remote places on highways. This has been largely due to
creation of various check posts / humps by the enforcement agencies
and the rampant illegal movement of goods carriages by moving cargo
in excess of he prescribed gross vehicle weight in contravention of
Motor Vehicles Act and also transporting general goods by carrying
fudged documents / papers involving large scale evasion of Central and
State taxes. Hence, the letter and spirit of bringing in National Permit
Scheme has stopped yielding further benefits to the economy and
transport industry.
Simultaneously, various State Governments were complaining
that truckers in many cases were operating with fudged National
Permit documents by evading authorisation fee belonging to the
complainant State.
Taking the difficulties of the transporter and the complaints of
the States into account, on 31st May 2002, the Central Government
notified under rule 88 (5) of the Central Motor Vehicles Rules, 1989,
that the National Permit will be in security printed water-mark paper
and have the hologram of the State Government or State Transport
Authority, as the case may be. However, except for the State of Orissa,
rest of the State Governments have not followed the revised National
Permit Rules.
The New System: A new system of National Permit for
truckers has been introduced with effect from 1st May 20105.
As stated above, under the existing system, a transporter is
required to pay Rs 20,000 annually per truck which allows it access to
the home State and three neighbouring States (could operate in a
5

The new scheme has been introduced after deliberation in the Empowered
Committee of State Transport Ministers. Prior to this, a committee headed by Mr.
Brahm Dutt, Secretary, Road Transport, has fixed an annual composite fee of Rs
15,000 per vehicle for the new National Permit.

57

maximum of four contiguous states, including his home state). For

each additional State, the transporter has to pay Rs 5,000. So if a truck
plies between Punjab and Tamil Nadu which could be one of the
longest trunk routes, passing through six States the total permit fee
would amount to Rs 30,000 a year.
In the new system, however, a National Permit is issued against
the payment of Rs 15,000 per truck a year. This would result in a
benefit of Rs 15,000 annually or Rs 1,250 a month for each truck.
The revenue from the National Permit collected centrally (by
State Road Transport Undertaking --a non-government organisation
acting as a collection agent) would be distributed among the States.
The distribution would be based on the fees that individual States have
collected in the preceding three years when the previous permit regime
was in place6. However, if a State had collected less than Rs 1 crore
during the last financial year, it will receive Rs 1 crore from the fees
collected in the new regime. For other individual States, the average of
fees collected in last three years will be divided by the countrys
average to arrive at the percentage share of each State in the collective
fees.
The fees will be deposited by the taxpayers in the State Bank
of India in the beginning, but in due course of time, other public sector
banks (viz. Union Bank of India and Punjab National Bank) and some
private banks (HDFC Bank and ICICI Bank) will also be brought into
the fold. The National Informatics Centre will develop a system to
enable Web-based replies to SMS queries relating to fee payment.
Procedurally, once the truck owner applies for a National
Permit at the Regional Transport Office (RTO), he will have to pay Rs
15,000 as annual fee at SBI and will get a receipt. Subsequently, the
bank will also send another receipt online to the concerned RTO office.
After verification, the applicant will receive an SMS stating the
position of his application and when the permit will be issued.
However, it is important to point out some of the anomalies that
would still persist.
First, the National Permit must be on security printed watermark paper and shall carry the hologram of the State Government or
State Transport Authority, as the case may be. This will take care of
the procedural maladies inflicting the National Permit scheme at
6
Under the new system, the Union territories will be the biggest losers as they would
not get anything from the permit fees that will be collected by State Road Transport
Undertakinga non-government organisation acting as a collection agent.

58

present. The total revenue contribution from State permits to goods

carriers is estimated to be around Rs 932 crore annually.
Second, for ensuring seamless travel, integrated check posts
need to be set up. It would take care of different kinds of taxes to be
levied only at the entry point of the State concerned. Third, the intrastate permits and counter signature reciprocal agreement permits
should be abolished. There should be only National Permits for all
inter-state operations. This will remove the time consuming process of
issuing counter-signature permits.
Third, the problems existing on highways, where the vehicle
owner has to pass through various impediments and harassments must
be looked into. It is said that in most cases, the transporters end up
paying illegal money to the various enforcement agencies located on
highways of all States and incur an estimated cost of Rs.10,000 per
month as highway expenses. This brings the total highway expense to
Rs.1,20,000/- per annum as a sort of permission to operate through
various States. Hence, a annual National Permit Fee being reduced to
Rs.15,000/- or Rs.20,000/- from Rs.25,000/- or Rs.30,000/- per annum
does not bring any major concession to a trucker, when he is shelling
out over Rs. 1,20,000/- per annum for his operations to the
enforcement agencies. Efforts must be made to ensure that such illegal
practices must be stopped. This would reduce the transportation cost
substantially.
Fourth, there seems to be inordinate delay on the part of the
Government in implementing the Carriage by Road Act, 2007, and
framing the rules to enforce it. Similarly, the Central Motor Vehicles
(Amendment) bill 2007 is not getting the right priority from the
Government. It has taken several years of labour to bring Carriage by
Road Act, 2007, to replace Carriers Act, 1865, and M.V. Act 1988.
The Carriage Act / Rules and MV amendment Bill have the potential
of shaking out the unhealthy elements in the road transport sector and
bringing in greater accountability and transparency in the operation of
common carriers and fleet owners, and can go a long way to bring
efficiency, cost effectiveness, road safety and improved tax compliance
from this sector.
The new system of National Permit is expected to save costs,
operation hurdles and time for both commercial vehicles and the State.
This would also result in the reduction in direct cost of the operator on
obtaining permit, which contributes approximately 2% of the total cost.
Operations cost for truckers would also come down as they would not
have to stop at State borders on account of permit related issues. Also,

59

the new regime would put an end to accumulation of goods in

warehouses due to permit problem. It is felt that lack of transport
permit results in an average backlog of 30 per cent of goods. Since
more vehicles will ply, commodity prices will come down due to
competition. As anyone would be able to operate on any route, delivery
promptness would improve. Finally, the consumers will benefit
through a marginal decrease in cost.
To conclude, the existing system of regulation and taxation of
road transport under the Indian Constitution are treated as two distinct
powers. While the former falls within the concurrent list and the power
is exercised by both the Central and State Governments; taxation of
motor vehicles is clearly within the ambit of State legislative
competence. Except for the national highways, the responsibility for
roads is vested in the State governments. However, the multiplicity of
taxation of the same base exists. Both Central and State Governments
impose taxes at the time of purchase of vehicle. The tax is also levied
on the registration of vehicles. In addition, there are umpteen taxes
levied by the State government at this juncture. Finally, the taxes are
also levied as per its use. The need of the hour is to remove the
multiplicity of taxes and control the overall incidence of these taxes.

60

Annexure A.4.1
Structure of Registration Fee in Indian States
Class of
Vehicle

State

Type of Vehicle

Motor Cycle

Andhra Pradesh

Imported Motor Cycle

Invalid Carriage
LMV

Bihar

Transfer of
ownership
(Rs.)

Half of the
New
Registration

200
20
200

300

800
400

600

Invalid Carriage
LMV

Delhi

Registration of vehicle
arrived from out state or
assignment of new
registration mark
(R.M.A)
(Rs.)

60

nontranspor
t
light
commer
cial
vehicle
(LCV)

Mediu
m
Vehicle
Heavy
Vehicle
Small
Vehicle

Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)

Permanent
Registration
of New
Vehicle
(Rs.)

NA

Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Motor Cycle
Imported Motor Cycle
Three wheeler
4 wheelers

Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Other Vehicles
Motor Cycle
Invalid Carriage
LMV

Temporary
Registratio
n fee
(Rs.)

20

30

20

100
Tractor and
Trailer
:Rs.150, and
others: Rs.
200

20
20

300
20

130

20
20
20
20
20

20

nontranspor
t
light
commer
cial
vehicle
(LCV)

20
30
10
100

60
20
200

200
60
20
200

30
10
100

150

300

300

150

400

800

800

400

200

400

400

200

61

Class of
Vehicle

State

Type of Vehicle

Heavy Good/Passenger
Vehicle (HGV/HPV)
Other Vehicles

Goa

Motor Cycle
Imported Motor Cycle
Three wheeler
4 wheelers

Temporary
Registratio
n fee
(Rs.)

300

Permanent
Registration
of New
Vehicle
(Rs.)
600

150 (370
extra for
Smart
Card)

300 (370
extra for
Smart Card)

300

400

200

300

600

300

20
200
300

10
100
150

250

Haryana
Himachal Pradesh

300

800
60
200
300

Mediu
m
Vehicle
Heavy
Vehicle
Small
Vehicle

Prescribed fee for

registration

400
half of the R
fee

300
300
300
20
200
300

Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Motor Cycle
Imported Motor Cycle
Three wheeler
LMV

800

300
300
60
300
300
200
300
800

Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Motor Cycle

400

600

25
Karnataka

150 (370 extra

for Smart
Card)
30
100

Invalid Carriage
LMV

Invalid Carriage

300

100
Mediu
m
Vehicle
Heavy
Vehicle
Small
Vehicle

Imported Motor
Vehicle
Motor Cycle

Imported Motor Cycle

Three wheeler
4 wheelers

300 (370 extra for Smart

Card)

Transfer of
ownership
(Rs.)

60
200

Invalid Carriage
LMV

Imported Motor Cycle

Three wheeler
4 wheelers

Registration of vehicle
arrived from out state or
assignment of new
registration mark
(R.M.A)
(Rs.)
600

Mediu
m
Vehicle

60
200
300

Half of the
registration fee

200
20

62

State

Type of Vehicle

Class of
Vehicle

Temporary
Registratio
n fee
(Rs.)

LMV

Maharashtra

Madhya Pradesh

Kerala

Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Other Vehicles
Motor Cycle
Imported Motor Cycle
Invalid Carriage
LMV
Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Other Vehicles
Motor Cycle
Imported Motor Cycle
Invalid Carriage
LMV
Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Other Vehicles
Motor Cycle
Imported Motor Cycle
Invalid Carriage
LMV
Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Other Vehicles
Motor Cycle

Mizoram

LMV
Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Other Vehicles

Permanent
Registration
of New
Vehicle
(Rs.)

Registration of vehicle
arrived from out state or
assignment of new
registration mark
(R.M.A)
(Rs.)

Transfer of
ownership
(Rs.)

200
300
800

400

50

600
300
60
200
20
200
300

30
100
10
100
150

800

400

400

200

600
300
260
400
220
400
500

300
150
230
300
210
300
300

1000

600

600

400

800
500
60
200
20
200
300

500
350
30
100
10
100
150

800

400

400

200

600
300

300
150

60
200
300

Half of the registration

fee

800

400
600

63

State

Type of Vehicle

Class of
Vehicle

Temporary
Registratio
n fee
(Rs.)

Permanent
Registration
of New
Vehicle
(Rs.)

50

60
200
20
200
300

Motor Cycle

Orissa

Nagaland

Imported Motor Cycle

Invalid Carriage
LMV
Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Other Vehicles
Motor Cycle

Transfer of
ownership
(Rs.)

Half of the
registration fee

800

400
600
300
Half of the
registration
fee

LMV
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Motor Cycle

Half of the
registration fee
60
200
300

400
600
60
200
20
200
300

Imported Motor Cycle

Invalid Carriage
LMV
Punjab

Registration of vehicle
arrived from out state or
assignment of new
registration mark
(R.M.A)
(Rs.)

Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Other Vehicles

Half of the
registration fee

800

400
600
300

Uttar Pradesh

Tamil Nadu

Motor Cycle
Imported Motor Cycle
Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Motor Cycle

Imported Motor Cycle

Invalid Carriage
LMV
Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)

30
100

30
100

Half of the
registration fee

400
200
200
300
300
Half of the
registration
fee

Half of the
registration fee
60
200
20
200
300
800

400

64

Class of
Vehicle

West Bengal

Uttaranchal

State

Type of Vehicle

Temporary
Registratio
n fee
(Rs.)

Permanent
Registration
of New
Vehicle
(Rs.)

Heavy Good/Passenger
Vehicle (HGV/HPV)
Motor Cycle

600

Imported Motor Cycle

Invalid Carriage
LMV

60
200
20
200
300

Imported Motor
Vehicle
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Other Vehicles
Motor Cycle
Imported Motor Cycle
4 wheelers

Invalid Carriage
LMV
Medium
Good/Passenger
Vehicle (MGV/MPV)
Heavy Good/Passenger
Vehicle (HGV/HPV)
Other Vehicles

Registration of vehicle
arrived from out state or
assignment of new
registration mark
(R.M.A)
(Rs.)

Transfer of
ownership
(Rs.)

Half of the
registration fee

800

400
600
100
Mediu
m
Vehicle
Heavy
Vehicle
Small
Vehicle

30
200

400
600
200
200

200
400
800
500
300

65

Annexure A.4.2
Structure of Permit Fee in Indian States
Andhra
Pradesh

Type of
vehicle
Good
Vehicle

Vehicles
exceeding
300 kgs in
laden
weight.
Vehicles
exceeding
300 kgs but
not
exceeding
1000 kgs in
laden
weight.
Vehicles
exceeding
1000
kgs
but
not
exceeding
1500 kgs in
laden
weight.
Vehicles
exceeding
1500
kgs
but
not
exceeding
3000 kgs in
laden
weight.
Vehicles
exceeding
3000
kgs
but
not
exceeding
4500 kgs in
laden
weight.
Vehicles
exceeding
4500
kgs
but
not
exceeding
5500 kgs in
laden
weight.
Vehicles
exceeding
5500
kgs
but
not
exceeding
9000 kgs in
laden
weight.

Vehicle belonging to other state

except Karnataka
For period not
For period
exceeding seven
not
days
exceeding
30 days
44.00
173.00

Vehicle belonging to Karnataka1

Goods Vehicles:

Vehicles exceeding
kgs in laden weight.

For period not

exceeding
seven days

For period
not exceeding
30 days

1000

85.00

189.00

53.00

216.00

Vehicles exceeding 1000

kgs but not exceeding 1500
kgs in laden weight.

98.00

234.00

75.00

302.00

Vehicles exceeding 1500

kgs but not exceeding 2000
kgs in laden weight.

104.00

247.00

87.00

345.00

Vehicles exceeding 2000

kgs but not exceeding 3000
kgs in laden weight.

111.00

273.00

98.00

389.00

Vehicles exceeding 3000

kgs but not exceeding 4000
kgs in laden weight.

130.00

325.00

131.00

518.00

Vehicles exceeding 4000

kgs but not exceeding 5500
kgs in laden weight.

156.00

397.00

173.00

690.00

Vehicles exceeding 5500

kgs but not exceeding 7000
kgs in laden weight.

182.00

481.00

Rates available in respect of vehicles plying between Andhra Pradesh and Karnataka State and Vehicles
belonging to Karnataka State and operating in Andhra Pradesh State on Temporary permits.

66

Vehicles
exceeding
9000
kgs
but
not
exceeding
12000 kgs
in
laden
weight.
Vehicles
exceeding
12000 kgs
but
not
exceeding
15000 kgs
in
laden
weight.
Vehicle
exceeding
15000 kgs
in
laden
weight.

Delhi

216.00

863.00

Vehicles exceeding 7000

kgs but not exceeding 8500
kgs in laden weight.

202.00

533.00

260.00

1035.00

Vehicles exceeding 8500

kgs but not exceeding 9500
kgs in laden weight.

221.00

585.00

260.00+ 6.00 for

every 250 kgs or
part thereof in
excess of 15000
kgs in laden
weight.

1035.00+
24.00 for
every 250
kgs or part
thereof in
excess of
15000 kgs
in laden
weight.

Vehicles exceeding 9500

kgs but not exceeding 10500
kgs in laden weight.

228.00

618.00

Vehicles exceeding 10500

kgs but not exceeding 12000
kgs in laden weight.
Vehicles exceeding 12000
kgs but not exceeding 13500
kgs in laden weight.
Vehicles exceeding 13500
kgs but not exceeding 15000
kgs in laden weight.
Vehicles exceeding 15000
kgs in laden weight.
Exceeding 15250 kgs in
laden weight.

260.00

715.00

293.00

800.00

325.00

910.00

400.00

1066.00

100.00 for
every 250 kgs
or part thereof
in excess of
15250 kgs

246.00 for
every 250 kgs
or part
thereof in
excess of
15250 kgs.
Tax and penalty on other State Vehicles plying unauthorized: In respect of other state vehicle which enter this state
after payment of tax on the strength of temporary permits for a period not exceeding seven days and for a period not
exceeding thirty days and over-stay in this state due to any reason or in respect of the other state vehicle which are
found plying in this state without any permit or tax payment, tax shall be levied at the rate of 1/3rd of quarterly tax
payable in respect of such vehicles in Andhra Pradesh state provided the over-stayal or stay does not exceed a month
together with a penalty of an equal amount irrespective of the date / the month of detection of the over-stayal.
.
Rates of tax in respect of vehicles plying between Andhra Pradesh, Maharashtra, Karnataka, Tamil Nadu and Orissa
covered by valid countersignature.: tax of Rs.3000/- per annum is levied under section 9 of the Andhra Pradesh Motor
Vehicles Taxation Act, 1963 (Act 5 of 1963) irrespective of the laden weight, on every goods vehicles which is
registered and normally kept in the State of Maharashtra, Karnataka, Tamil Nadu and Orissa covered by counter
signature of permanent permit and operating on routes lying partly in the State of Maharashtra, Karnataka, Tamil Nadu
and Orissa and partly in the State of Andhra Pradesh
The goods carriages covered by National permits shall pay a composite tax of Rs.3000/- per annum for plying in a
State and Rs.1500/- per annum for plying in Union Territory irrespective of the Laden Weight of which are registered
and normally kept for use in any of the other states including the Union Territories of India and authorized to ply in
Andhra Pradesh.
2000/Rs.
5 yrs.
Local Permit
Light goods Vehicle (LGV)
500
1 yrs.
(author
ization)
5 yrs.
Heavy Goods Vehicle
2500/-

67

National Permit

Goa

Fees for Temporary

Permits, their
renewal &
endorsement

Light goods Vehicle

(LGV)/Medium

2015/Rs. 500
(author
ization)

5 yrs.
1 yrs.

Heavy Goods Vehicle

2515/-

5 yrs.

For first 3 days

300.00

After first 3 days, till end of

week,
After first week, for next
week, or part thereof
Change of vehicle type as
specified in the permit
Taxi/autorickshaw/t
empo plying
regularly

Fees for Permits

other than
Temporary Permit,
their renewal &
endorsement

300.00
180.00

For one region

750.00

for entire country

1500.0
0

Stage carriage/contract
carriage (other than motor
cab)

6000.0
0

Motor cab
(a) for entire India
(b) for entire UP
(c) for one region
For goods carrier
Himach
al
Pradesh

Composite fee2

300.00

2500.0
0+500.
00
1500.0
0
750.00
4800.0
0
Temp.

Regular

Goods Carriages
Light Goods Vehicle

10

20

Medium Goods vehicles/

Heavy Goods Vehicles
Multi Axle Vehicles

10

20

25

50

Contract Carriage
Taxi Cabs}
Autorickshaws}
Maxi Cabs

10.00

20.00

15.00

Contract Carriage buses

25.00

1st
yea
r
200
.00

Subsequent
year
125.00

300
.00
300
.00
200
.00

250.00

30.00

250
.00

150.00

50.00

300
.00

250.00

250.00
125.00

Stage Carriage
Mini/Big Buses/ Contract
300.00
250.00
200
125.00
Carriage Buses
.00
Private Service Vehicles
15.00
300.00
250
150.00
Light Vehicles
.00
Private Service Vehicles
30.00
250.00
200
125.00
Medium Vehicles
.00
Having Seating Capacity to carry more than 12 passengers excluding driver: Rs.10000/- Per
month (30 days) for three trips and Rs. 4000/- for any additional trip within the same month.

This fee is charged from the vehicles of other States visiting HP under National Permit Rate of
Composite fee are as shown in the next columns.

68

Kerala

Temporary Permits

Regular/Pucca
Permits Grant/renewal/varia
tion/ transfer

Madhya
Pradesh

Contract Carriage
Permit

Goods Carriage
Permit
PSV
Temp Permit
(Goods)
Nature of job
Special Permit
(PSV)
Tourist Permit
National Permit
(Goods)
Mahara
shtra

Transfer of Permit
Contract carriage
permit

Goods carriage
permit

Having Seating Capacity to carry more than six passengers but not more than 12 passengers
excluding driver : Rs.6000/- Per quarter or Rs.2200/- per month (30 days)
Having Seating Capacity not more than 5 passengers excluding driver : Rs.600/- Per quarter
All types of Goods Carriage: Rs.5000/- Per annum (25 % rebate in respect of multi-axle
vehicle) in lump-sum to be paid in advance at the time of issue of National Permit, the validity
of which shall be one year commencing from the date of issue of the National Permit in respect
of goods carriages.
Fees (in Rs.)
a) Contract Carriage (13
200
20 seats)
b) Maxi Cab
200
c) Contract Carriage More
500
than 20 seats
d) Goods Carriage
250
e) Stage Carriage
250
a) Autorickshaw
250

b) Motor Cab
c) Maxi Cab
d) Contract Carriage (13
20 seats)
e) Contract Carriage (more
than 20 seats)
f) PSV Permits
g) Goods Carriage
h) Stage Carriage
i) All India Tourist Omni
Bus Permit
j) All India Tourist Taxi

500
2000
2500

k) National Permit for

Goods Carriage
Duplicate Permit
Extension of validity of
permits of other states
Grant of special permits
under Section 88(8) of
Motor Vehicles Act

1500

3000
500
1000
5000
2000
1000

200
1000
250

Metered Motor Cab

100

Non Metered Cab

150

Maxi Cab

150

All

1500

All

1500

All

750

Class of vehicle

Fee (Rs.)

All

300

All

300

All

1500

All
Metered motor cab
(rickshaw)
Non metered motor cab
Maxi cab

1500

All

100
150
150
200

69

Private service
vehicle
Temp permit
(goods carriage)
Special permit
(pass. Vehicle)
Tourist permit
National permit
(goods carriages)
Transfer of permit
on death of the
permit holder
(metered cab , taxi
cab , maxi-cab)
Manipu
r

Mizora
m

Contract Carriage
Permit

All

200

All

100

All

100 per month

All

300

All

300

All

50

Permit Fee Annual

Licence to carry in all not
more than two (excluding
driver) & conductor)
Licence to carry in all more
than two but not more than
four passengers (excluding
driver & conductor)
Licence to carry in all more
than four but not more than
six passengers (excluding
driver & conductor)
Licence to carry in all more
than six but not more than
eight passengers (excluding
driver & conductor)
Licence to carry in all more
than eight but not more than
twelve passengers
(excluding driver &
conductor)
Licence to carry in all more
than twelve but not more
than sixteen passengers
(excluding driver &
conductor)

Amount (in Rs.)

100

Type of Vehicles

Fee Payable

Maxi cab
Buses
Taxi
Auto Passengers

Rs. 500/Rs. 500/Rs. 300/Rs. 100/-

Description of Service

Fees to be paid

Autorickshaw

Permit fees Rs.100 for

one year

Motor Cab (TAXI)

Permit fees Rs.300 for

one year

Maxi cab All Mizoram

Permit fees Rs.500 for

one year

Maxi Cab Inter State

Maxi Cab Authorization
Goods Carriage
Permit

300

300

300

400

400

Permit
Period
3 yrs.
3 yrs.
3 yrs.
1 yrs.

Rs.500
Rs.4000 for one year

AMMC
Auto
(G)-Rs.
100
b)LGV/MGV/HGV Rs.
500

70

National Permit

Orissa

Stage Carriage
Permit
Surrender of
Permit
Type of permit

Temporary permit
(Maximum up to
120 days)
Permanent permit
(for 5 years)

Rs.20
Rs.500(Authorisation fee &
D.D. as prescribed for
concerned state & valid for
one year)
Rs. 500 for three years.
Rs.10
Type of vehicle

Application fees

All types of vehicle

Rs. 100 and Rs. 150 for

contract carriage

Good carriage and private

service vehicle
Stage carriage

Rs. 500/-

Motor cab

Rs.200/-

Contract carriage

Rs.750/-

Others

Rs.500/-

Surcharge for
permit (per vehicle
per permit)
National permit

Rs. 500/-

Duplication of
permit
Punjab

Rajasth
an

Tamil
Nadu

Fee of application
for permits

Rs.500/-

Same as permit fee

Type of Vehicle

Permit
fee for
one
region
Rs 80/per week

Permit fee
for more
than one
region
Rs. 100/per week

Rs.
5000/Rs.12500
/Rs.
1000/Rs.
7500/Rs.
1000/Rs. 500/-

Permit
fee rs.
5000/authoriza
tion frr
Rs.
1000/Same as
permit
fee

Amount

Bus
Rs. 600.00
Mini Bus or goods carriage
Rs. 200.00
or tourist cab
Motor cab (For operation in
Rs. 150.00
Punjab territory only)
Tempos or Auto Rickshaws
Rs. 50.00
or other vehicle
Fee for special / temporary
Rs. 100.00
permit / duplicate copy
By enacting The Rajasthan Motor Transport Vehicles Toll Act, 1991, Toll was levied on every motor transport vehicle
registered outside the State and entering the limits of Rajasthan and plying under a permit granted or deemed to have
been granted under The Motor Vehicles Act, 1988, at such rate not exceeding Rs. 200/- per vehicle per day as the State
Government may by notification in the official Gazette, specify from time to time with effect from 12.10.1991. The
levy of this Toll was deferred with effect from 1.9.93 and the composite tax on National Permits on goods vehicle was
increased from Rs. 1500/- per year to Rs. 5000/- per year with effect from 1.9.1993.
Contract Carriage
Description of Service
Fees to be paid
Appellate
Permit
Authority
Autorickshaw
Permit fees Rs.300
State
adjacent district
Transport
endorsement fees Rs.25
Appellate
Total Fees Rs.325
Tribunal
with fees
Rs.750

71

Uttar
Pradesh

Fees for Temporary

Permits, their
renewal &
endorsement

Motor Cab (TAXI)

Permit fees Rs.525 State

vide endorsement fees
Rs.300 Total Fees Rs.825

Tourist Motor Cab (T.Taxi)

Rs.550

Maxi cab

Permit fees Rs.750 state

vide endorsement fees
Rs.300 Total Fees 1050

Omni-Bus Contract
Carriage

Rs.1500

Omni-Bus Contract
Carriage State vide
endorsement

Rs.300

All India Tourist Motor Cab

Authorisation

Rs.500

All India Tourist Vehicle

(Omni Bus)

Rs.1500

Goods Carriage Permit

Permit fees Rs.1200 State

vide endorsement fees
Rs.150 Total Fees
Rs.1350

National Permit

1.Rs.1500
2.Rs.500
(Authorisation fee & D.D.
as prescribed for
concerned state & valid
for one year)

For first 3 days

300.00

After first 3 days, till end of

week,
After first week, for next
week, or part thereof
Change of vehicle type as
specified in the permit
Taxi /
autorickshaw/
tempo plying
regularly

For one region

State
Transport
Appellate
Tribunal
with fees
Rs.750
State
Transport
Appellate
Tribunal
with fees
Rs.750
State
Transport
Appellate
Tribunal
with fees
Rs.750
State
Transport
Appellate
Tribunal
with fees
Rs.750
State
Transport
Appellate
Tribunal
with fees
Rs.750
State
Transport
Appellate
Tribunal
with fees
Rs.750
State
Transport
Appellate
Tribunal
with fees
Rs.750
State
Transport
Appellate
Tribunal
with fees
Rs.750
State
Transport
Appellate
Tribunal
with fees
Rs.750

300.00
300.00
180.00

750.00

72

Fees for Permits

other than
Temporary Permit,
their renewal &
endorsement

Uttaran
chal

Temporary permit

for entire country

1500.00

Stage carriage/contract
carriage (other than motor
cab)

6000.00

Motor cab
(a) for entire India
(b) for entire UP
for one region
For goods carrier
For first three days
After first three days, till
end of week
After first week, for next
week, or part there of
Change of vehicle type as
specified in the permit
Fees for Taxi / autorickshaw
/ tempo plying regularly

Fees for Permits

other than
Temporary Permit,
their renewal and
endorsement

West
Bengal

Application charges

Grant or renewal of
permit other than
Temporary and
Special permits

Private service
vehicle

Metered Taxi of
Kolkata region and
Kolkata
Metropolitan
District area region
Temporary Permit

2500.00+500.00
1500.00
750.00
4800.00
300.00
300.00
300.00
180.00
For one region 750.00
and For entire country
1500.00

Stage carriage / contract

carriage (other than motor
cab)
Motor cab ( for entire India
)
Motor cab ( for entire
Uttarakhand )
Motor cab ( for one region )
For goods carrier
Permit for a tourist vehicle
Renewal of any such permit
Special permit
National Permit
Renewal of national permit
Temporary permit
Counter-signature on a
temporary permit
Application for replacement
of vehicle
Stage carriage/special stage
carriage-per region per
vehile per annum
Contract carriage within
state
Auto-rickshaw
Good carriage (per vehicle
per region per annum)
Good carriage (per vehicle
per annum for more than
one region)
Per vehicle per annum per
region within the state of
West Bengal
Per vehicle per annum for
the whole of state of West
Bengal
For Taxi limited to only
Kolkata region
For plying in the entire
Kolkata
Stage Carriage
Contract Carriage

6000.00

2500.00 + 500.00
1500.00
750.00
4800.00
500
500
300
500
500
300
500
1000
800

500
200
500
1000

200

2500

500
2500

100
100

73

Special Permit
Fees for countersignature of permits

Vehicles like stage carriage

and special stage carriage
plying in different earlier
approved routes on the
strength of temp. permits for
a period of 17 weeks within
the State per vehicle per
region per week at the time
re-issue of such permit.

50

For Good Carriage (Per

vehicle per region per week
or part thereof within the
State)
For Good Carriage (For any
other States(s) per vehicle
per State per week)
within the State
beyond the State
Stage Carriage: When a
permit valid for more than
one region has been issued
by State Transport
Authority, West Bengal, fee
for counter-signature shall
not be charged for
authorizing the vehicle to
ply in the regions covered
by permit.

100

Stage Carriage: for one

region in respect of the
vehicle coming from any
other State per annum or
part thereof.

400

Stage Carriage: For more

than one region in respect of
a vehicle coming from any
other State per annum or
part thereof.

750

Contract carriage: when a

permit valid for more than
one region has been issued
by the State Transport
Authority, West Bengal, fee
for counter-signature

Rs. 150 per annum or part

thereof, per region, per
vehicle within the State

Contract carriage: for one

region in respect of a
vehicle coming from any
other State per annum or
part thereof

250

Contract carriage: for more

than one region in respect of
a vehicle coming from any
other State per annum or
part thereof
Goods Carriage: per annum
or part thereof per region
per vehicle registered in the
State

450

200

600
1200
Rs. 200 per annum or part
thereof per region, per
vehicle within the State

200

74

For transfer of
permit

Duplicate Permit

Goods Carriage: per annum

or part thereof per vehicle,
registered in the State of
West Bengal, for the whole
of the State

300

Goods Carriage: per annum

or part thereof for one
region in respect of a
vehicle coming from any
other State

400

Goods Carriage: per annum

or part thereof for more than
one region in respect of a
vehicle coming from any
other State

700

Private Service Vehicles:

Per annum or part thereof
per region per vehicle
registered in the State.

300

Private Service Vehicles:

per annum or part thereof
per vehicle registered in the
State for the whole of the
State.

350

Private Service Vehicles:

per annum or part thereof
for one region in respect of
a vehicle coming from any
other State.

325

Private Service Vehicles:

per annum or part thereof
for more than one region in
respect of a vehicle coming
from any other State.
transfer of permit on the
death of the holder of the
permit
transfer of permit other than
the death of the holder of
the permit
(d) bus/minibus

650

500

6000

(b) other than bus/minibus

(except metered taxi and
auto-rickshaw)

4000

metered taxi

3000

(d) auto-rickshaw

2000
Rs. 1000 for each part of
the permit.

NA: Not Available

75

Annexure A.4.3
Structure of Motor Vehicle Tax in Indian States (for Two Wheelers)
States

Base

Period

Andhra Pradesh

Cubic Capacity

Life time tax

Assam

Unladen Weight

15 years

Bihar

Unladen Weight

Life time

Chhattisgarh
Delhi
Goa
Gujarat

Cost of Vehicle
Cubic Capacity
Cost of Vehicle
Cost of Vehicle

Life time
Life time
Life time
Life time

Haryana

Unladen Weight

Annual

Himachal Pradesh

Cubic Capacity

Life time

Jammu and Kashmir

Karnataka
Kerala

HP

Quarterly

Cost of Vehicle

One Time

Cost of Vehicle

Life time

Maharashtra

Registered
Unladen Weight
(ULW)
Cost of Vehicle

Manipur

Unladen Weight

Meghalaya

Unladen Weight

Annual

Mizoram

Unladen Weight

Annual

Orissa

Unladen Weight

Annual

Punjab

Cubic Capacity

Life time

Rajasthan

Cubic Capacity

Life time

Sikkim

Cubic Capacity

Annual

Tamil Nadu

Cubic Capacity

Life time

Uttar Pradesh

Unladen Weight

Life time

Uttaranchal

Unladen Weight

Life time

West Bengal

Cubic Capacity
and Power of
battery operated

Life time

Madhya Pradesh

Life time
Life time
Life time

Two wheelers
At the time of registeration of new vehicles
Upto 60 cc 9% of the cost
Above 60 cc 9% of the cost
Invalid carriage-Rs.1040/ULW less than 65 Kgs: Rs.1500/ULW 65 to 90 Kgs: Rs 2500/ULW 90 to 135Kgs.: Rs 3500/ULW more than 135Kgs:Rs.4000/and Rs. 500 every 5 year after 15 years
[Old vehicle required to be registered on transfer from another state:
one time tax is to be fixed after allowing a depreciation of 7% per
annum of the tax payable for a new vehicle of the same category at the
current cost price.]
ULW upto 50 kgs. Rs 900; 51 to 100 kgs. Rs 1200;
Above 100 kgs. Rs 1500
4% of the cost of vehicle
Upto 50 cc Rs. 650; 51cc or above Rs. 1220
5% of the cost of vehicle
6% of the cost of vehicle
ULW not exceeding 90.72 Kg, Token tax of Rs. 150/PY; and
ULW exceeding 90.72 Kg, Rs. 500/PY.
Engine capacity up to 50 cc-3% and above 50 cc,
4 % of the price of personal motor vehicle
Scooter: Rs.60/-p.q.
Motor Cycle cost does not exceed Rs. 50,000/-: Rs.100/-p.q.
Motor Cycle Cost does not exceed Rs. 50000: 8% of cost
Motor Cycle with side car Cost exceeding Rs. 50000: 10% of cost
Engine capacity not exceeding 95 CC, Rs. 35/PQ and exceeding 95
CC, Rs. 45/PQ plus 6% of the cost of vehicle.
ULW upto 70 kg. 3 % of the cost; Life time tax.
Above 70 kg. 3 % of the cost; Life time tax.
7% of the cost
Scooters not exceeding 90 kg in unladen weight RS 60/PY plus Rs.
675 (LTT)
exceeding 90 kg in unladen weight Rs. 100/PY plus Rs. 1125 (LTT)
Not exceeding 90 Kg, in weight unladen Rs. 65/PY;
Exceeding 90Kg, in weight unladen Rs. 100/PY
Below 90 kgs road tax of Rs. 80/PY with registration fee of Rs. 60/PY
Not exceeding 91 Kg, in ULW, Rs. 150/PY plus Rs..1500/- or 5% of
the cost of the vehicle whichever is higher;
Exceeding 91Kg, in weight unladen Rs. 200/PY or Rs. 2000 or 5% of
the cost whichever is higher (both One Time Tax)
Motorcycle upto 50 cc: 2% of the cost
Motorcycle above 50 cc: 3% of the cost
Up to 100cc, 5% of the cost; More than 100cc and up to 150cc 6% of
the cost; and More than 150 cc 7% of the cost
Engine capacity upto 80 cc Rs. 100/PY
engine capacity above 80 cc upto 170 cc Rs. 200/PY;
above 170 cc upto 250 cc Rs.300/PY; above 250 cc Rs. 400/PY
Motor cycels- Non Transport Vehicles 8 Percent of the Total cost of
the vehicle with effect from 1/7/2008
Upto 50 cc Rs.1000, exceeding 50 cc but not 75 cc Rs. 1500 (LTT) ;
exceeding 75 cc but not 170 cc Rs. 2500 (LTT) ;
exceeding 170 cc , Rs. 3000(LTT)
Not exceeding ULW 90.72 kgs.: Rs 900; Scooter: Rs. 1600
Motor cycle cost does not exceed Rs. 50,000: Rs. 1600
Moped Rs.800; Scooter/ Motercycle Rs. 1500/Motorcycle other than battery operated Up to 80 cc: Rs.1560
Exceeding 80 cc but not exceeding 170 cc: Rs. 3125; Exceeding 170 cc
bit not exceeding 250 cc: Rs.4685; Exceeding 250 cc: Rs.6250; Battery
Operated Motorcycle; Above 0.25 KW and up to 0.35 KW: Rs. 1560
Above 0.35 KW and up to 0.50 KW: Rs. 3125; Above 0.50 KW and up
to 0.75 KW: Rs. 4685; Above 0.75 KW: Rs. 6250

76

Annexure A.4.4
Structure of Motor Vehicle Tax in Indian States
(for Three Wheelers)
States

Andhra Pradesh

Period

Personal

Commercial

Not more than 3 persons Rs.12.10/- PQ

Not more than 4 persons.Rs. 105.00/- PQ
More than 4 persons but not more than 6
person Rs.326.55/-PQ

Quarterly

Arunachal Pradesh

Rs.3500 and Rs.

1000 every 5 years
after 15 years

Assam

15 years

Bihar

Life time

Chhattisgarh

Life time

5% of the cost of
vehicle (LTT)

Delhi

Life time

Tri Cycle Rs. 1525

(LTT)

Goa

Life time

Not more than 3 persons Rs.300/- PQ

Not more than 4 persons.Rs.600/-PQ
More than 4 persons but not more than 6
person Rs.750/-PQ
Auto Rickshaw seating capacity not more than
4 persons: Rs. 990/-PY
Contract Carriages : Three Wheeler with
seating capacity not more than six persons
excluding driver
Rs.1920/-PY
Not more than 3 persons Rs. 50 per seat
More than 4 persons but not more than 6
person Rs. 200 per seat per Quarter
Contract Carriages : Three Wheeler with
seating capacity not more than six persons
excluding driver
Rs. 100 per seat per Quarter
Auto Rickshaw Rs.305/- PY

Seating capacity
upto 3: 2.5% of
cost (LTT)
seating capacity
exceeding 3, upto
6: 6% of cost
(LTT)

Gujarat

Life time

Haryana
Himachal Pradesh
Jammu and Kashmir
Jharkhand
Karnataka

Annual
Life time
Quarterly
One Time

Rs. 2500 (LTT)

Kerala

Life time

6% of cost (LTT)

Madhya Pradesh

Life time

Maharashtra

Life time

6% of cost (LTT)
7% of the cost
(LTT)

Manipur

Life time

Rs. 1350 (LTT)

Meghalaya

Annual

Tri Cycle Rs. 90/PY

Auto Rickshaw
Rs. 200/-PY

Mizoram

Annual

Not more than 2 passengers: Rs. 60/- PQ

Rs. 120/-PQ (petrol) and Rs. 130/-PQ (diesel)
Rs. 350/- per vehicle per annum
Auto Rs. 75/-PY
Tempo Rs.125/-PY

Rs. 250/-PY (passenger) and Rs. 350/-PY for

good

77

States

Period

Personal

Orissa

Annual

Tri Cycle Rs. 78/PY

Punjab

Life time

Rajasthan

Life time

Sikkim

Annual

Tamil Nadu

Life time

Commercial

Cost of vehicle
upto 1,50,000/3% of the cost of
the vehicle. (LTT)
Cost of vehicle
above 1,50,000/4% of the cost of
Three wheeled vehicles: 9% of the cost
the vehicle. (LTT)
of the vehicle/chassis
Cost of chassis
upto 1,50,000/3.75% of the cost
of the vehicle.
(LTT)
Cost of chassis
above 1,50,000/5% of the cost of
the vehicle. (LTT)
Tri Cycle Rs. 3000
Rs. 260/-PY
(LTT)
Tri Cycle Rs. 3000
(LTT)

Tipura

Not more than 3 persons Rs. 95/-PQ

Not more than 4 persons.Rs. 185/-PQ
More than 4 persons but not more than 6
person Rs. 185/-PQ
Not more than 3 persons Rs. 95/-PQ
Not more than 4 persons
Rs. 185/-PQ
More than 4 persons but not more than 6
person Rs. 185/-PQ
Contract Carriages : Three Wheeler with
seating capacity not more than six persons
excluding driver Rs. 30/- per seat per month

Uttar Pradesh

Uttaranchal

West Bengal

Annual

Seating Capacity not more than 4 Rs. 260/ p.a

78

Annexure A.4.5
Structure of Motor Vehicle Tax in Indian States
(for Non-Transport Four Wheelers)
Cars

Taxis

Invalid carriage

If the owner has only one non transport

vehicle, the life tax on such vehicle is at 9% cost of
the vehicle. However, if the same person purchases a
second vehicle during the subsistence of the first
vehicle, he is charged at 12% of cost of that vehicle.
Cars and Jeeps and other Non-Transport Vehicles not
exceeding 2286 kgs in ULW Additional tax payable
@ 9% plus for drawing trailers Rs.3385/-

If
the
owner has only one
non transport vehicle,
the life tax on such
vehicle is at 9% cost
of
the
vehicle.
However, if the same
person purchases a
second vehicle during
the subsistence of the
first vehicle, he is
charged at 12% of
cost of that vehicle.
Omni bus
with seating capacity
between 8 in all & 10
in all 9% of the cost

Rs.1040/- (OTT)

States

Andhra
Pradesh

Assam

Bihar

New personalized 4 Wheeler vehicles

Original cost price upto Rs.3.00 lakhs : 3% of the
original cost One Time Tax for 15 years and Rs.5000
Tax for every 5 years after 15 years
Original cost price upto Rs.15.00 lakhs: 4% of the
original cost One Time Tax for 15 years and Rs.7000
Tax for every 5 years after 15 years
Original cost price above Rs.15.00 lakhs: 5% of the
original cost One Time Tax for 15 years and
Rs.10,000 Tax for every 5 years after 15 years
Original cost price above Rs.20.00 lakhs: 7% of the
original cost One Time Tax for 15 years and
Rs.12,000 Tax for every 5 years after 15 years
Old vehicle requiring to be registered in Assam on
transfer from another State. One time tax to be fixed
after allowing a depreciation at the rates 7% per
annum of the tax payable for a new vehicle of the
same category at the current cost price.

NA
NA

NA
Seating capacity 3-5 one time tax Rs.3750/-

NA

Life time tax @ 5% of the cost up to Rs. 5

lakhs.
There after 6% of the cost of the vehicle.

Rs. 200/- Per

Seat /Per Quarter
for All India
Tourist
Permit.
Rs. 150/- Per
Seat /Per Quarter
for other than All
India Tourist
Permit.

9% of the cost
(OTT)

NA

NA

6% of the cost of vehicles

6% of the cost of
vehicles
NA

Invalid carriage
cost Up to 6 lakh:
5% of the cost
Cost more than 6
lakh: 6% of the
cost
NA

Chattisgarh

Goa

Gujarat
Haryana

New Personalized four wheeler vehicles Cost up to

NA

79

States

Himachal
Pradesh

Jammu and
Kashmir

Cars
Rs. 4 lakh: Rs. 2000
Cost above Rs. 4 lakh and up to Rs. 10 lakh: 1 % of
cost. Cost above Rs. 10 lakh: 1.5 % of cost
Personal Motor vehicles having engine capacity up to
1000 CC
Two and a half percent (2.5 %) of the price of the
personal motor vehicle
Personal Motor Vehicles having engine capacity
above 1000 CC
Three percent (3 %) of the price of the personal motor
vehicle

Motor car upto 14 HP: 150.00/-p.q.

Motor Car above 14 HP: 500.00/-p.q.
Motor Car with trailer: 150.00/-p.q.
Vintage Car: 500.00/- (OTT)
Classic Car: 1000.00/- (OTT)

Karnataka

Kerala

6% of the cost of vehicle

Taxis

Invalid carriage

Taxi car or Jeep

having seats upto six
(excluding drivers),
Premier/
Maruti/Gypsy/ Maruti
Car/Jeep including
Ambassador Car: Rs.
1350/-p.a.
Upto 5 seats: Rs.
250.00/-p.q.
More than 5 seats:
375.00/-p.q.
Motor cars, Jeeps,
Omni Buses and
Private
Service
Vehicles having floor
area upto 5 Sq.Mtrs,
cost of which does not
exceed Rs.5 Lakhs:12
Percent of cost of the
vehicle
Motor cars, Jeeps,
Omni Buses and
Private
Service
Vehicles having floor
area upto 5 Sq.Mtrs,
cost of which exceeds
Rs.5 Lakhs but not
exceeding
Rs.10
Lakhs: 13 percent of
the cost of the vehicle
Motor cars, Jeeps,
Omni Buses and
Private
Service
Vehicles having floor
area upto 5 Sq.Mtrs,
cost of which exceeds
Rs.10 Lakhs: 16
percent of the cost of
the vehicle.
Life time tax for
goods vehicles having
gross vehicle weight
exceeding 1,500 kgs
but not exceeding
3,000 Kgs in weight
laden, whether used
for hire or reward or
not.
Goods vehicle having
gross vehicle weight
exceeding 1500 Kgs
and not exceeding
2000 Kgs:
Rs. 10000.00
Goods vehicle having
gross vehicle weight
exceeding 2000 Kgs
and not exceeding
3000 Kgs: Rs. 15,000
6% of the cost of

Invalid Carriage:
60.00/-p.q

Invalid Carriages: Rs.

10/-p.q.

6% of the cost of

80

Cars

States
Madhya
Pradesh
Maharashtra

Manipur

Meghalaya

5% of the cost
7% of the cost of the vehicle
Light personalized Vehicle
Wt of which does not exceed 1000kg: Rs. 2925
Exceeds 1000kg but not exceeds 1500kg: Rs.3600
Exceeds 1500kg but not exceeds 2000kg: Rs. 4500/-.
Above 2000 kg but every additionality of 1000kg: (+)
Rs.2925
Vehicle constructed and used solely for conveyance
of passengers and their personal luggage; If it is 15
horse-power or less: Rs. 225/-p.a. and If it exceeds 14
horse-power : Rs. 275/-p.a.

Orissa
2% of the price for four wheeled personalized vehicle
Punjab

Rajasthan

Seating Capacity upto 5 persons including driver

Cost upto 4,00,000/-: 4% of the cost of the vehicle
More than 4,00,000/- and upto 8,00,000/-: 5% of the
cost of the vehicle
Cost more than 8,00,000/-: 6% of the cost of the
vehicle
Seating Capacity 5 to 10 persons including driver
Cost upto 4,00,000/-: 5.5% of the cost of the vehicle
More than 4,00,000/- and upto 8,00,000/-: 6.5% of the
cost of the vehicle
Cost more than 8,00,000/-: 7% of the cost of the
vehicle
Motor car Engine capacity upto 900 cc: Rs. 1000.00
Engine capacity above 900 cc upto 1490 cc: Rs.
1200.00 Engine capacity above 1490 cc upto 2000 cc:
Rs. 2500.00
Engine capacity above 2000 cc: Rs. 3000.00

Sikkim

Tamil
Nadu

Taxis

Invalid carriage

vehicle
6% of the cost of
vehicle
7% of the cost of the
vehicle
NA

vehicle
Rs. 360.00/(OTT)

NA

NA

NA

Rs. 45/- p.a.

2% of the price for
four wheelers

2% of the price for

four wheeled
personalized vehicle
NA

7% of the cost of the

vehicle

Rs.450

NA

Omnibus registered
as
non-transport
vehicle
With
seating
capacity upto 10:
Rs. 1750.00
With
seating
capacity
beyond
10: Rs. 1750.00
Omnibus registered
as
educational
Institute bus:With
seating
capacity upto 10:
Rs. 1750.00
With
seating
capacity
beyond
10: Rs. 1750.00 for
10 plus Rs. 188.00
for each additional
seat beyond.

Non Transport Vehicles 8 Percent of the

Total cost of the vehicle with effect from
1/7/2008
Car Jeep etc.
Weighing not more than 700 Kgs unladen:
600/Weighing more than700 Kgs. but not more
than 1,500 Kgs unladen: Rs 800/Weighing more than 1500 Kgs but not
more than 2,000 Kgs unladen: Rs. 1000/Weighing more than 2000 Kgs but not

81

States

Tripura

Uttar
Pradesh

Uttaranchal

Cars
more than 3000 Kgs unladen: Rs. 1100/Weighing more than 3000 Kgs Unladen in
respect of which private Transport vehicle
permit is not required under the Motor
Vehicles Act: Rs.1250/Imported Cars
Weighing not more than 700 Kgs unladen:
Rs. 1800/Weighing more than700 Kgs. but not more
than 1,500 Kgs unladen: Rs. 2350/Weighing more than 1500 Kgs but not
more than 2,000 Kgs unladen: Rs. 2700/Weighing more than 2000 Kgs but not
more than 3000 Kgs unladen: Rs. 2900/Weighing more than 3000 Kgs Unladen in
respect of which private Transport vehicle
permit is not required under the Motor
Vehicles Act: Rs. 3300/Motor Cars, Jeep kept for the personal use
of owner: Rs. 275/-p.a.
Motor Cars owned by companies
registered under the Companies Act, 1956
for carrying employees or other
passengers: Rs. 550/-p.a.
Car / Jeep driven by petrol: 2.5 % of cost
value. Car / Jeep driven by diesel: twice of
2.5 % of cost value. Trailer attached in Car
/ Jeep: Rs. 605. Car /Jeep having unladen
weight exceeding 5000 kgs;
driven by petrol: 2.5 % of cost + Rs 5324
for every 1000 kgs or part thereof driven
by diesel: twice of 2.5 % of cost + Rs 5324
for every 1000 kgs or part thereof
Trailer attached in Car /Jeep having
unladen weight exceeding 5000 kgs: Rs.
1210.00
Car / Jeep: 2.5% of cost value
Trailer attached in Car / Jeep: Rs.605/Car / Jeep having unladen weight
exceeding 5000 kgs : 2.5% of cost +
Rs5324 for every 1000 kgs or part there
of
Trailer attached in Car / Jeep having
unladen weight exceeding 5000 kgs:
Rs.1210/-

Taxis

One Time tax on

all non-transport
vehicles other
than two
wheelers and
invalid carriage
Rs. 27501
NA

Invalid carriage

Rs. 30/-p.a

NA

Vehicles,
not
being
motor
cycles,
constructed and
used solely for
the conveyance
of persons and
light
personal
luggage,
with
seating
accommodation
for not more than
six
persons,
exclusive of the
driver:
Rs.30/p.a.

82

States

West
Bengal

Cars

LMV (Car) (For Indviduals., Regd.

Societies, IT exempted organisations)
Engine capacity up to 900 cc: Rs.600/ p.a.
Engine capacity more than 900 cc to but
not more than 1490 cc: Rs.800/-p.a.
Engine capacity more than 1490 cc to but
not more than 2000 cc: Rs.1600/-p.a.
Above 2000 cc: Rs. 2300/- p.a.
LMV (Car) (For other than above)
Engine capacity up to 900 cc: Rs.1000.
Engine capacity more than 900 cc to but
not more than 1490 cc: Rs.1200 Engine
capacity more than 1490 cc to but not more
than 2000 cc: Rs.2500. Above 2000 cc: Rs.
3000
OR
One Time Tax
Motor Car & Omnibus
Engine capacity up to 900 cc: Rs.8550.
Engine capacity more than 900 cc to but
not more than 1490 cc: Rs.9900. Engine
capacity more than 1490 cc to but not more
than 2000 cc: Rs.15300
Above 2000 cc: Rs. 20000
Motor Car & Omnibus
(For other than above)
Engine capacity up to 900 cc: Rs.9900.
Engine capacity more than 900 cc to but
not more than 1490 cc: Rs.11250. Engine
capacity more than 1490 cc to but not more
than 2000 cc: Rs.18000. Above 2000 cc:
Rs. 22000. Battery Operated Motor Car &
Omnibus (only non-transport) OTT
Power Up to 2.5 KW: Rs.8500/-. Power
above 2.5 KW: Rs.13500/Omnibus: NT. Seating capacity 8 to 10 :
Rs. 1400/ p.a. Seating capacity 11:
Rs.1550/- p.a. Seating capacity 12:
Rs.1700/-p.a.
Omnibus registered as PSV. Seating
capacity 8 to 10 : Rs. 1800/ p.a.
Seating capacity 11: Rs.1950/- p.a. Seating
capacity 12: Rs.2100/-p.a.

Taxis
Trailers drawn by
vehicles covered
by this Article:
Rs.55/-p.a.
Seating capacity
up to 4: Rs.600/p.a.
Seating capacity
5: Rs. 800/-p.a.

Invalid carriage

NA

83

Annexure A.4.6
Structure of Motor Vehicle Tax in Indian States
(for Goods Vehicles )
State

Andhra
Pradesh

Arunachal
Pradesh

Assam

Bihar

Trucks
Vehicle not exceeding 300 kgs in laden weight: Rs 424.20/p.q.
Exceed to 300kgs but not more than 1000: Rs.529.20/-p.q.
Exceed to 1000kgs but not more than 1500: Rs.741.30/-p.q.
Exceed to 1500kgs but not more than 3000: Rs.847.35/-p.q.
Exceed to 3000kgs but not more than 4500: Rs.954.45/-p.q.
Exceed to 4500kgs but not more than 5500: Rs.121272.60/p.q.
Exceed to 5500kgs but not more than 9000: Rs.1946.70/-p.q.
Exceed to 9000kgs but not more than 12000: Rs.2437.05/-p.q.
Exceed to 12000kgs but not more than 15000: Rs.2967.30/p.q.
Exceeding 15000 kgs in laden weight: Rs.2967.30/- p.q. and
Rs. 69.30 for every 250 kgs or part thereof in excess of 15000
kgs

Trailer
Additional tax
payable in respect of
goods vehicles used
for drawing trailers;
For esch trailer not
exceeding 1000 kgs
in laden weight:
Rs.529.20/-p.q.
Trailer exceeding
1000 kgs in laden
weight but not
exceeding 3000 kgs
in laden weight:
Rs.794.85/-p.q.
For esch trailer not
exceeding 3000 kgs
in laden weight:
Rs.159.45/-p.q.

Rs. 2960/-p.a.

Rs. 350/- p.a.

Annual Rates
Authorized to carry 1 M.T. or less: Rs.1750.00
Exceeding 1 M.T. to 3 M.T.: Rs.3500.00
Exceeding 3 M.T. to 9 M.T.: Rs.3500.00+Rs.700.00 for every
additional 1 M.T. above 3 M.T.
Exceeding 9 M.T.: Rs.8000.00+Rs.200.00 for every
additional 1 M.T. above 9 M.T.:
Authorized to carry 12 M.T. & above.
Rs.10,000.00+Rs.300.00 for every additional 1 M.T. above
12 M.T.
Quarterly Rates
Upto 1 MT : Rs 500/-p.q.
Exceeding 1 M.T. to 3 M.T.: Rs. 1000/-p.q. and Rs.175.00 for
every additional 1 M.T. above 3 M.T.
Exceeding 3 M.T. to 9 M.T.: Rs.2200.00/-p.q. + Rs.50.00 for
every additional 1 M.T. above 9 M.T.
Exceeding 12 M.T. & above : Rs.2800.00 + Rs.75.00 for
every additional 1 M.T. above 12 M.T.
Goods carriages excluding trailers: Rs. 500 per tonne on the
gross weight will be payable annually. Over and above this
amount, if gross vehicle weight exceeds 5 tonnes, additional
amount on the increasing weight will be payable as per the
following;
Upto 5 tonnes: Nil
Exceeding 5 tonnes but not exceeding 10 tonnes: 10%
Exceeding 10 tonnes but not exceeding 15 tonnes: 20%
Exceeding 15 tonnes but not exceeding 20 tonnes: 30%
Exceeding 20 tonnes but not exceeding 25 tonnes: 40%
Exceeding 25 tonnes but not exceeding 30 tonnes: 50%

Light trailer: Rs.

150/- p.q.
Medium trailer : Rs.
300/-p.q.
Heavy trailer:
Rs.500/-p.q.

Tractors-Trailers:
Tractor to be used
for agriculture
purpose fitted with
more than 25 h.p.
capacity along with a
trailer having laden
weight capacity up to
5 tonnes: Rs. 5000/one time tax; and
tractor up to 25 h.p.

84

State

Trucks
Exceeding 30 tonnes but not exceeding 35 tonnes: 60%
Exceeding 35 tonnes but not exceeding 40 tonnes: 70%
Exceeding 40 tonnes but not exceeding 45 tonnes: 80%
Exceeding 45 tonnes but not exceeding 50 tonnes: 90%
Exceeding 50 tonnes but not exceeding 55 tonnes: 100%
Exceeding 55 tonnes for each 5 tonnes: 100% plus 10% for
each additional slab of 5 tonnes.

Rs. 300/- Per Quarter up to 2000 kg. GVW. There

after Rs. 75 /- Per Annual for each 500 kg or
part thereof.

Chhattisgarh

Goa

Trailer
capacity and trailer
having laden weight
capacity up to 3
tonnes: Rs. 3000/one time tax.
Trailer: 500 per tone
annually on gross
vehicle weight, and
additional payable
amount
corresponding to the
increasing weight of
the vehicle will be
levied as indicated
follow;
Upto 5 tonnes: Nil
Exceeding 5 tonnes
but not exceeding 10
tonnes: 10%
Exceeding 10 tonnes
but not exceeding 15
tonnes: 20%
Exceeding 15 tonnes
but not exceeding 20
tonnes: 30%
Exceeding 20 tonnes
but not exceeding 25
tonnes: 40%
Exceeding 25 tonnes
but not exceeding 30
tonnes: 50%
Exceeding 30 tonnes
but not exceeding 35
tonnes: 60%
Exceeding 35 tonnes
but not exceeding 40
tonnes: 70%
Rs.75 /-per 500 Kgs.
Per Quarter
Rs.175 /- Per Quarter
in case ULW does
not
exceed 1000 Kgs.
Rs.225 /- Per Quarter
in case ULW
exceeds 1000
kgs. but does not
exceed 2000 Kgs.
Rs.300 /- Per Quarter
thereafter for each
additional 1000 kgs
or part thereof.
Rs.100 /- Per Quarter
for each trailer.

GVW up to 1000 kgs: Rs. 800

85

State

Trucks
exceeds 1000 but does not exceed 2000 kgs :Rs.1800
exceeds 2000 but does not exceed 3000 kgs: Rs.2200
exceeds 3000 but does not exceed 4000 kgs: Rs.2700
exceeds 4000 but does not exceed 5000 kgs : Rs.3100
exceeds 5000 but does not exceed 6000 kgs: Rs.3600
exceeds 6000 but does not exceed 7000 kgs : Rs.3900
exceeds 7000 but does not exceed 8000 kgs : Rs.4100
exceeds 7000 but does not exceed 9000 kgs
exceeds 8000 but does not exceed 9000 kgs : Rs.4600
exceeds 9000 but does not exceed 10000 kgs: Rs.4900
exceeds 10000 but does not exceed 11000 kgs: Rs.5300
exceeds 11000 but does not exceed 12000 kgs: Rs.5800
exceeds 12000 but does not exceed 13000 kgs: Rs.6100
exceeds 13000 but does not exceed 14000 kgs: Rs.6400
exceeds 14000 but does not exceed 15000 kgs: Rs.6900
Excess of 15000 kgs kgs
exceeds 15000 but does not exceed 16500 kgs: Rs.7500
every 1000 kgs or part thereof in excess of 16500 kgs :
Rs.400
Rs. 2000+650 per every 1000 kg or part thereof exceeding
3000

Gujarat

Haryana

Gross vehicle weight not exceeding 1.2 tonne: 300.00/- p.a.

Gross vehicle weight exceeding 1.2 tonne but not exceeding 6
tonnes: 1200.00/- p.a.
Gross vehicle weight exceeding 6 tonnes but not exceeding
16.2 tonnes: 2400.00/- p.a.
Gross vehicle weight exceeding 16.2 tonnes but not
exceeding 25 tonnes: 3500.00/- p.a.
Gross vehicle weight exceeding 25 tonnes: 4500.00/- p.a.
Light Goods Vehicle: 1500.00 per annum
Medium Goods vehicles: 2000.00 per annum
Heavy Goods Vehicles /Multi Axle Vehicles:
: 2500.00 per annum

Himachal
Pradesh

Jammu and
Kashmir

Jharkhand
Karnataka

Upto 3600 Kgms registered laden weight : Rs.900/-p.q.

Exceeding 3600 Kgms but not exceeding 8100 Kgms
registered laden weight: Rs.1000/-p.q.
Exceeding 8100 Kgms registered laden weight: Rs.1100/-p.q.

NA
Exceeding 3,000 Kgs but noot exceeding 5,500 Kgs:
1,200.00/-p.q.
Exceeding 5,500 Kgs but noot exceeding 12,000 Kgs:
1,800.00/-p.q.

Trailer

Non agricultural
tractors Rs.
2000+400 per every
1000 Kg or part
thereof exceeding
3000
NA

Tractors plying with

public carriers or
private carriers
permit when
carrying goods
which are not
incidental to
agriculture belonging
to the owners.:
Rs.1694/-p.a.
Rs.250/-p.q.
(Trailer used for
agriculture purpose
are exempted from
the tax)
NA
Rs 500 at the time of
registration (One
time tax)

86

State

Kerala

Trucks
Exceeding 12,000 Kgs but noot exceeding 15,000 Kgs:
2,200.00/-p.q.
Exceeding 15,000 Kgs: 2,200.00/-p.q. Plus Rs. 75.00/-p.q. for
every 250 Kgs or part thereof in excess of 15,000 Kgs
Additional tax payable in respect of goods vehicles specified
in paragraph (1) used for drawing trailers for each trailer in
weight laden.For every 1,000 Kgs or part thereof
Provided that two or more goods vehicles shall not be
chargeable under this item in respect of the same trailer:
Rs.100.00/-p.q.
Multiaxled Goods vehicles other than articulated vehicles for
which tax is levied under item No 10. having weight laden
exceeding 15,000 Kgs
2,200-00/-p.q. plus Rs 75/- for every 250 Kgs
Motor cycle trucks not exceeding 300 Kg in Gross vehicle
weight: 135.00/-p.q.
Vehicles not exceeding 1000 Kg in Gross vehicle weight:
220.00/- p. q.
Vehicles exceeding1000 Kg but not exceeding 1500 Kg in
Gross vehicle weight: 420.00
Vehicles exceeding 1500 Kg but not exceeding 2000 Kg in
Gross vehicle weight 550.00
Vehicles exceeding 2000 Kg but not exceeding 3000 Kg in
Gross vehicle weight 705.00
Vehicles exceeding 3000 Kg but not exceeding 4000 Kg in
Gross vehicle weight 840.00
Vehicles exceeding 4000 Kg but not exceeding 5500 Kg in
Gross vehicle weight 1210.00
Vehicles exceeding 5500 Kg but not exceeding 7000 Kg in
Gross vehicle weight 1430.00
Vehicles exceeding 7000 Kg but not exceeding 9000 Kg in
Gross vehicle weight 1760.00
Vehicles exceeding 9000 Kg but not exceeding 9500 Kg in
Gross vehicle weight 1870.00
Vehicles exceeding 9500 Kg but not exceeding 10500 Kg in
Gross vehicle weight 2090.00
Vehicles exceeding 10500 Kg but not exceeding 11000 Kg in
Gross vehicle weight 2310.00
Vehicles exceeding 11000 Kg but not exceeding 12000 Kg in
Gross vehicle weight 2530.00
Vehicles exceeding 12000 Kg but not exceeding 13000 Kg in
Gross vehicle weight 2750.00
Vehicles exceeding 13000 Kg but not exceeding 14000 Kg in
Gross vehicle weight 2970.00
Vehicles exceeding 14000 Kg but not exceeding 15000 Kg in
Gross vehicle weight 3080.00
Vehicles exceeding 15000 Kg but not exceeding in Gross
vehicle weight Rs.3080 + Rs.110 for every 250 Kg or part
thereof in excess of 15000 Kg.

Trailer

For each trailer not

exceeding 1000 Kg
in Gross vehicle
weight: Rs.155.00/p.q.
For each trailer not
exceeding 1000 Kg
but not exceeding
1500 Kg in Gross
vehicle eight: Rs.
320.00/-p.q.
For each trailer not
exceeding 1500 Kg
but not exceeding
2000 Kg in Gross
vehicle eight: Rs.
430.00/-p.q.
For each trailer not
exceeding 2000 Kg
but not exceeding
3000 Kg in Gross
vehicle weight: Rs.
585.00/-p.q.
For each trailer not
exceeding 3000 Kg
but not exceeding
4000 Kg in Gross
vehicle weight: Rs.
790.00/-p.q.
For each trailer not
exceeding 4000 Kg
but not exceeding
5500 Kg in Gross
vehicle
weight:
Rs.1000.00/-p.q.
For each trailer not
exceeding 5500 Kg
but not exceeding
7000 Kg in Gross
vehicle
weight:

87

State

Madhya
Pradesh

Trucks

Does not exceed 2000 Kgs: Rs.600.00/-p.q. or life time tax

10% of The cost
exceeds 2000 Kgs. But Does not exceed 4000 Kgs.:

Trailer
Rs.1320.00/-p.q.
For each trailer not
exceeding 7000 Kg
but not exceeding
9000 Kg in Gross
vehicle
weight:
Rs.1540.00/-p.q.
For each trailer not
exceeding 9000 Kg
but not exceeding
9500 Kg in Gross
vehicle
weight:
Rs.1650.00/-p.q.
For each trailer not
exceeding 9500 Kg
but not exceeding
10500 Kg in Gross
vehicle
weight:
Rs.1760.00/-p.q.
For each trailer not
exceeding 10500 Kg
but not exceeding
12000 Kg in Gross
vehicle
weight:
Rs.1980.00/-p.q.
For each trailer not
exceeding 12000 Kg
but not exceeding
13000 Kg in Gross
vehicle
weight:
Rs.2090.00/-p.q.
For each trailer not
exceeding 13000 Kg
but not exceeding
14000 Kg in Gross
vehicle
weight:
Rs.2200.00/-p.q.
For each trailer not
exceeding 14000 Kg
but not exceeding
15000 Kg in Gross
vehicle
weight:
Rs.2310.00/-p.q.
For each trailer not
exceeding 15000 Kg
but not exceeding in
Gross vehicle weight
Rs.2310/-p.q. +
Rs.110/-p.q. for
every 250 Kg or part
thereof in excess of
15000 Kg.
For each trailer the
unladen weight of
which does not

88

State

Maharashtra

Manipur

Trucks
Rs.900.00/-p.q.
exceeds 4000 Kgs. But Does not exceed 6000 Kgs :
Rs.1300.00/-p.q.
exceeds 6000 Kgs. But Does not exceed 8000 Kgs :
Rs.1700.00/-p.q.
exceeds 8000 Kgs. But Does not exceed 10000 Kgs:
Rs.2100.00/-p.q.
exceeds 10000 Kgs. But Does not exceed 12000 Kgs: Rs.
2500.00/-p.q.
exceeds 12000 Kgs. But Does not exceed 14000 Kgs: Rs.
2900.00/-p.q.
exceeds 14000 Kgs. But Does not exceed 16000 Kgs: Rs.
3300.00/-p.q.
exceeds 16000 Kgs. But Does not exceed 18000 Kgs: Rs.
3700.00/-p.q.
and thereafter for each additional 2000 Kgs. Or Part thereof :
Rs.500.00/-p.q.
Register laden weight upto 750 kg Rs. 1200/pa
Register laden weight exceeding 750 kg & upto 1500 kg : Rs.
1950/pa
Register laden weight exceeding 1500 kg & upto 3000 kg :
Rs. 2700/pa
Register laden weight exceeding 3000 kg & upto 4500 kg :
Rs. 3600/pa
Register laden weight exceeding 4500 kg & upto 6000 kg :
Rs. 4500/pa
Register laden weight exceeding 6000 kg & upto 7500 kg :
Rs. 5400/pa
Register laden weight exceeding 7500 kg & upto 9000 kg:
Rs. 6500/-pa
Register laden weight exceeding 9000 kg & upto 10500 kg :
Rs.7500/-pa
Register laden weight exceeding 10500 kg & upto 12000 kg :
Rs.8550/-pa
Register laden weight exceeding 12000 kg & upto 13500 kg :
Rs.9750/-pa
Register laden weight exceeding 13500 kg & upto 15000 kg :
Rs. 10950/-pa
Register laden weight exceeding 15000 kg & upto 15500 kg :
Rs. 11350/-pa
Register laden weight exceeding 15500 kg & upto 16000 kg :
Rs. 11750/-pa
Register laden weight exceeding 16000 kg & upto 16500 kg :
Rs. 12150/-pa
Register laden weight exceeding 16500 kg for every 500 kg
Rs.450/- for every 500 kg Rs. 450/- pa
One time tax ( @ 7 times of annual rate on the basis of cost of
the vehicle for Light commercial vehicle/ it is option for
others
Motor Vehicles used for Transport or haulage of Goods or
materials, the registered laden wt. of which:does not exceed 1 tonne.: Rs 400/ p.a. and Rs. 100/-p.q.
exceeds 1 tonne but not exceed 1.5 tonne: Rs. 560/-p.a. or Rs.
140/-p.q.
exceeds 1.5 tonne but not exceed 2 tonne.: Rs. 720/-p.a.

Trailer
exceed 1000 kgs:
Rs.28/-p.q.
Exceed 1000 kgs:
Rs.66/-p.q.

NA

Vehicles plying for

hire or reward
Does not exceed 1
tonne.
Rs.
600/-p.a.
Exceeds 1 tonne but

89

State

Trucks
or Rs. 180/-p.q.
exceeds 2 tonne but not exceed 2.5 tonne: Rs.880/-p.a. or Rs.
220/-p.q.
exceeds 2.5 tonne but not exceed 3 tonne: Rs. 1040/-p.a. or
Rs. 260/-p.q.
exceeds 3 tonne but not exceed 3.5 tonne: Rs.1200/-p.a. or
Rs. 300/-p.q.
exceeds 3.5 tonne but not exceed 4 tonne : Rs.1360/-p.a. or
Rs. 340/-p.q.
exceeds 4 tonne but not exceed 4.5 tonne: Rs.1520/-p.a. or
Rs. 380/-p.q.
exceeds 4.5 tonne but not exceed 5 tonne: Rs.1680/-p.a. or
Rs. 420/-p.q.
( j) exceeds 5 tonne but not exceed 5.5 tonne: Rs.1840/-p.a. or
Rs. 460/-p.q.
(k) exceeds 5.5 tonne but not exceed 6 tonne: Rs. 2000/-p.a.
or Rs. 500/-p.q.
(l) exceeds 6 tonne but not exceed 6.5 tonne: Rs. 2160/-p.a.
or Rs. 540/-p.q.
(m) exceeds 6.5 tonne but not exceed 7 tonne: Rs. 2320/-p.a.
or Rs. 580/-p.q.
(n) exceeds 7 tonne but not exceed 7.5 tonne: Rs. 2480/-p.a.
or Rs. 620/-p.q.
(o) exceeds 7.5 tonne but not exceed 8 tonne: Rs. 2640/-p.a.
or Rs. 660/-p.q.
(p) exceeds 8 tonne but not exceed 8.5 tonne: Rs 2800/-p.a.
or Rs. 700/-p.q.
(q) exceeds 8.5 tonne but not exceed 9 tonne: Rs. 2960/-p.a.
or Rs. 740/-p.q.
(r) exceeds 9 tonne but not exceed 9.5 tonne: Rs. 3120/-p.a.
or Rs. 780/-p.q.
(s) exceeds 9.5 tonne but not exceed 10 tonne: Rs.3280
/- or Rs. 820/-p.q.
(t) above 10 tonne: The rate specified in (s) above plus
rupees three hundred and twenty for every additional one
tonne or parts thereof over and above ten tonne.

Trailer
not
exceed
1.5
tonne.: Rs. 760/-p.a
Exceeds 1.5 tonne
but not exceed 2
tonne.: Rs. 920/-p.a
exceeds 2 tonne but
not exceed 2.5 tonne:
Rs. 1080
Exceeds 2.5 tonne
but not exceed 3
tonne: Rs.1240
Exceeds 3 tonne but
not exceed 3.5 tonne:
Rs.1400/-p.a.
Exceeds 3.5 tonne
but not exceed 4
tonne: Rs. 1560/-p.a.
Exceeds 4 tonne but
not exceed 4.5 tonne
Rs.1720/-p.a.
Exceeds 4.5 tonne
but not exceed 5
tonne: Rs. 1880/-p.a.
Exceeds 5 tonne but
not exceed 5.5 tonne:
Rs.2040/-p.a.
Exceeds 5.5 tonne
but not exceed 6
tonne: Rs. 2200/-p.a.
Exceeds 6 tonne but
not exceed 6.5 tonne:
Rs. 2360/-p.a.
Exceeds 6.5 tonne
but not exceed 7
tonne: Rs. 2520/-p.a.
Exceeds 7 tonne but
not exceed 7.5 tonne:
Rs. 2680/-p.a.
Exceeds 7.5 tonne
but not exceed 8
tonne: Rs. 2840/-p.a.
Exceeds 8 tonne but
not exceed 8.5 tonne:
Rs. 3000/-p.a.
Exceeds 8.5 tonne
but not exceed 9
tonneRs. 3160/-p.a.
Exceeds 9 tonne but
not exceed 9.5 tonne:
Rs. 3320/-p.a.
Exceeds 9.5 tonne
but not exceed 10
tonne: Rs. 3480/-p.a.
above 10 tonne: Rs.
3480/p.a.

90

State

Meghalaya

Trucks

Vehicles Plying for Hire or Reward- Authorised to carry one

metric tonne or less: Rs 600/-p.a. plus Rs. 180/-p.a. for every
additional 1/2 metric tonne or part thereof authorized load of
goods

Not exceed 7500 kgs ULW + 1 additional MT: Rs. 840 /p.a.+Rs. 410/-p.a.
Mizoram

Nagaland

Orissa

Punjab

Rajasthan

Transport vehicle are taxed on the basis of the load capacity.

In the matter of good vehicle taxes are levied at Rs.450.00 for
1 matric tonne and Rs.140.00 for every additional () half
metric tonne
Not exceeding-1000 kg laden weight: Rs.540/- p.a.
Between 1001-2000kg: Rs.2356/- p.a.
Between 2001-5000kg: Rs.2890/- p.a.
Between 5001-10000kg: Rs.4955/- p.a.
Between 10001-13000kg: Rs.7179/- p.a.
Between 13001-16200kg: Rs.10440/- p.a.
Exceeding-16200 kg in laden weight for every additional 500
kg or part thereof: Rs.10440/- p.a.+375/- p.a.
GVW upto 7500 Kgs: Rs. 1500/- per annum plus SRT
(Special Road Tax) Rs. 1210/- per annum
GVW 7500 kgs to 12000 Kgs: Rs. 2000/- per annum plus
SRT Rs. 1410/- per annum
GVW above 12000 Kgs: Rs. 2500/- per annum plus SRT Rs.
1500/- per annum
Multi Axle Vehicle: Rs. 2500/- per annum plus SRT Rs.
1200/- per annum
Annual Tax
Articulated Vehicle
Cost of chassis/vehicle upto Rs.10,00,000. :2% of the cost of
horse. + Special Road Tax (SRT) 0.40% of the cost of horse
Cost of chassis/vehicle above Rs.10,00000: Rs. 20000/- + Rs.
50 for every Rs. one lakh or part thereof of cost exceeding
Rs.10 lakh + Rs. 4000/- + Rs. 50/- for every Rs. one lakh or
part thereof of the cost of horse exceeding Rs.10,00,000.
Other than Articulated vehicle:
Cost of the chassis/vehicle upto Rs. 3,00,000: 1.5% of the
cost of the chassis/vehicle subject to a maximum of Rs.
2250/- + 1% of the cost of the chassis/ vehicle (SRT)
Cost of the chassis/vehicle more than Rs. 3,00,000 and upto
Rs. 6,00,000: 2250/- + 0.75% of the cost of the chassis/
vehicle exceeding Rs. 3 lakh. + (SRT) Rs. 2000/-+ 0.35% of
the cost of the chassis/ vehicle exceeding Rs. 3 lakh.
Cost of Chassis/Vehicle more than Rs. 6,00,000 and up to

Trailer
plus Rupees
three hundred and
twenty for
every
additional one tonne
or parts thereof over
and above ten tonne
Light: Rs. 240/p.a.
Medium Trailers:
Rs.460/-p.a.
Heavy Trailers Rs.
800/-p.a.
Light Rs. 125/-p.a.
Medium Trailers:
Rs.250/-p.a.
Heavy Trailers Rs.
500/-p.a.
NA

NA

NA

(Annual Tax)
Cost of vehicles up
to Rs.10,00,000:
1.0% of the cost of
vehicle.
More than
Rs.10,00,000 and up
to Rs. 20,00,000:
1.5% of the cost of
vehicle,
Cost of vehic above
Rs. 20,00,000 for
every Rs. 1000/- or
part thereof in excess
of Rs. 20,00,000:
0.05% of every
Rs.1000/- or part

91

State

Sikkim

Trucks
Rs.10,00,000: Rs. 4500/- + 0.95 % of the cost of chassis/
vehicle exceeding Rs. 6 lakhs +(SRT) Rs.3050/-+0.5% of the
cost of the chassis/vehicle exceeding Rs. 6 lakh.
Cost of chassis/Vehicle above Rs. 10,00,000: 8300/- + Rs. 50
for every Rs. one lakh or part thereof of cost exceeding Rs.10
lakhs."+ (SRT) Rs. 5050/- + Rs. 50/- for every Rs. one lakh
or part thereof of the cost exceeding Rs. 10 lakh.
Or Optional (LUMP SUM TAX)
Articulated vehicle: 20% of cost of the horse.
Other than Articulated vehicle
Four wheeled goods vehicle having G.V.W. upto 3000 Kg.:
10% of the cost of the vehicle/chassis
Four wheeled goods vehicle having G.V.W. more than 3000
kg. and cost of chassis/vehicle up to Rs. 6,00,000: 9% of the
cost of the vehicle/chassis
If cost of the chassis/vehicle more than Rs. 6,00,000: 11% of
the cost of the vehicle/chassis.

Trailer
thereof in addition to
rate as specifed
above.
Cost of chassis up to
Rs.10,00,000: 1.5%
of the cost of chassis.
More than
Rs.10,00,000 and up
to Rs. 20,00,000: 2%
of the cost of chassis,
Cost of chassis
above Rs. 20,00,000
for every Rs. 1000/or part thereof in
excess of Rs.
20,00,000: 0.05% of
every Rs.1000/- or
part thereof in
addition to rate as
specifed above.
Trailer used as goods
vehicles: 4% of the
cost of the trailer OR
Non-agricultural
tractor trailers used
as a goods vehicles:
9% of cost of tractor
to which trailer is
attached.

Upto 500 kgs gross vehicle weight: Rs 871/-p.a.

Exceeding 500 kgs but not exceeding 2000 kgs gross vehicle
weight : Rs 871/-p.a. plus Rs. 99/- For every additional 250
kgs or part thereof above 500 kgs.
Exceeding 2000 kgs but not exceeding for 4000 kgs gross
vehicle weight.Every additional. 250 kgs or Part thereof
above 2000 kgs: Rs. 1465/- plus Rs. 124/Exceeding 4000 kgs but not exceeding 8000 kgs gross vehicle
weight Part thereof above 2000 kgs: Rs. 2451/- plus Rs. 73/for every additional. 250 kgs or part thereof above 4000 kgs.
Exceeding 8000 kgs Gross vehicle weight: Rs. 3241/- plus
Rs. 99/- for every additional 250 kgs or part thereof above
8000 kgs.

Upto 1000 Kgs gross

vehicle weight: Rs.
360/-p.a.
Exceeding 1000 kgs
but not exceeding
2000 kgs gross
vehicle weight: Rs.
360/-p.a plus Rs.
36/-for every
additional 250 kgs or
Part thereof above
1000 kgs.
Exceeding 2000 kgs
but not exceeding
4000 kgs gross
vehicle weight: Rs.
575/- p.a. plus Rs.
60/- for every
additional 250 kgs or
part thereof above
2000 kgs.
Exceeding 4000 kgs
but not exceeding
8000 kgs gross
vehicle weight: Rs.

92

State

Tamil Nadu

Tripura

Uttaranchal

Trucks

Goods Carriages not exceeding 3000 Kgs in weight laden :

Rs.2400/- per annum, tax shall be payable either annually at
the rate payable or Life Time at the rate of Rs.19,200/LW upto 3000 kgs. Rs 600 PQ
Above 3000 to 5500 kgs. Rs 950 PQ
Above 5500 to 7500 kgs. Rs 1500 PQ
Above 7500 to 9000 kgs. Rs --- PQ
Above 9000 to 12000 kgs. Rs 1900 PQ
Above 12000 to 13000 kgs. Rs 2100 PQ
Above 13000 to 15000 kgs. Rs 2500 PQ
Exceeding 15000 kgs. Rs 2500 PQ plus Rs 75 for every
additional 250 kgs. or part thereof.

Upto 1000 Kg registered laden weight: Rs.105.00/- p.a.

Upto 3000 Kg registered laden weight: Rs.500.00/- p.a.
Exceeding 3000 Kg but not exceeding 5560 Kg registered
laden weight: Rs.750.00/- p.a.
Exceeding 5560 Kg but not exceeding 8860 Kg registered
laden weight.: Rs.1350.00/- p.a.
Exceeding 8860 Kg but not exceeding 12219 Kg registered
laden weight: Rs.2100.00/- p.a.
Exceeding 12219 Kg registered laden weight: Rs.4200.00/p.a.
Goods carriage for every metric tonne of the GVW or part
thereof:
Rs. 70.00/-p.q. per MT of GVW or part thereof for one region
85.00 per MT of GVW or part thereof for more than one
region

Trailer
1005/-p.a. plus Rs.
100/- for every
additional 250 kgs or
part thereof above
4000 kgs.
Exceeding 8000 kgs
gross vehicle weight:
Rs. 2600/- plus Rs.
150/- for every
additional 250 kgs or
part thereof above
8000 kgs.
LW up to 3000 kgs.
Rs 340 PQ
Above 3000 to 5500
Rs 400 PQ
Above 5500 to 9000
Rs 700 PQ
Above 9000 to
12000 Rs 810 PQ
Above 12000 to
13000 Rs 1010 PQ
Above 13000 to
15000 kgs. Rs 1220
PQ
Exceeding 15000
kgs. Rs 1220 PQ
plus Rs 50 for every
additional 250 kgs.
or part thereof
Rs. 1650 for all
trailers drawn by
non-transport
vehicles (OTT)
others
Upto 500 Kg
registered laden
weight: Rs.165/-p.a.
Exceeding 500 Kg
registered laden
weight:
Rs.400/-p.a. for first
500 kg plus. Rs
50.00/-p.a. for every
additionally 200Kg
or part thereof.
Trailer attached in
Car / Jeep :Rs. 605
(OTT)
Trailer attached in
Car / Jeep having
unladen weight
exceeding 5000 kgs
Rs. 1210 (OTT)

93

State

Uttar
Pradesh

West
Bengal

Trucks
Goods carriage for every metric tonne of the GVW or part
thereof:
Rs. 70.00/-p.q. per MT of GVW or part thereof for one region
85.00 per MT of GVW or part thereof for more than one
region

GVW up to 3500 kgs. Rs 700 PY

upto 5500 kgs. Rs 1400 PY
upto 7000 kgs. Rs 1900 PY
upto 9000 kgs. Rs 2300 PY
upto 12000 kgs. Rs 3700 PY
upto 14000 kgs. Rs 5000 PY
upto 15000 kgs. Rs 5500 PY
upto 16200 kgs. Rs 6200 PY
upto 25000 kgs. Rs 11450 PY
upto 31000 kgs. Rs 15050 PY
Articulated Vehicles: for WB vehicles
26400 kgs: Rs. 15000/-PY
35200 kgs: Rs. 25000/-PY

Trailer
Trailer attached in
Car / Jeep :Rs. 605
(OTT)
Trailer attached in
Car / Jeep having
unladen weight
exceeding 5000 kgs
Rs. 1210 (OTT)
GVW upto 2000
kgs. Rs 500 PY
upto 4000 kgs. Rs
900 PY
upto 6000 kgs. Rs
1350 PY
upto 8000 kgs. Rs
1950 PY
upto 10000 kgs. Rs
2900 PY
upto 12000 kgs. Rs
4300 PY
upto 13000 kgs. Rs
5250 PY
upto 14000 kgs. Rs
5950 PY
upto 15000 kgs. Rs
6650 PY
Exceeding 15000
kgs.: Rs 6650 plus
Rs. 200 for every
additional 250 kgs.
of part thereof

94

Annexure A.4.7
Structure of Motor Vehicle Tax in Indian States
(for Passenger Vehicles)
State

Stage Carriage

Contract Carriage

Andhra
Pradesh

APSRTC Vehicles Every registered owner who

owns or keeps in his possession or control more than 2000
Motor Vehicles for plying on hire or reward shall pay 5%
gross traffic earnings in respect of town (urban) services
and 7% in respect of other services as motor vehicle tax.
APSRTC is the only owner who qualifies to pay tax under
this category.
Motor Vehicles plying for hire and used for
transport of passengers.Vehicles permitted to carry in all.
Not more than 3 persons (LMV Cycle
rickshaw power): Rs. 12.10/-p.q.
Not more than 4 persons: Rs. 105/-p.q.
More than 4 persons but not more than 6
persons: Rs. 326.55/-p.q.
Vehicles permitted to carry 7 persons in all for
every person other than the driver: Rs. 200/-p.q.
Vehicles permitted by to carry 7 persons in all
and covered by All India Tourist Taxi Permits: Rs. 625.05/p.q.
Vehicles permitted to carry more than 6
passengers and plying as stage carriages on town service
routes.
In respect of vehicles permitted to ply as
ordinary services for every passenger (other than the driver
and conductor) which the vehicle is permitted to carry: Rs.
863.10/-p.q.
In respect of vehicles permitted to ply as
ordinary services for every passenger (other than the driver
and conductor) which the vehicles is permitted to carry and
where the total distance permitted to be covered by the
vehicle in a day.
Does not exceed 100 kms: Rs. 346.50/-p.q.
Exceeds 100 kms. but does not exceed 160 kms:
Rs. 516.60/-p.q.
Exceeds 160 kms. But does not exceed 240 kms:
Rs. 648.90/-p.q.
Exceeds 240 kms: Rs. 693/-p.q.
Vehicles permitted to carry more than 6
passengers and plying as stage carriages on routes other
than town service routes.
In respect of vehicles permitted to ply as express
services, for every passenger (other than the driver and
conductor) which the vehicle is permitted to carry and
where the total distance permitted to be covered by the
vehicle in a day.
Does not exceed 320 kms: Rs. 1146.60/-p.q.
Exceeds 320 kms but does not exceed 1,000
kms: Rs.1514.10/-p.q.
In respect of vehicles permitted to ply as
ordinary services, for every passenger (other than the driver
and conductor) which the vehicle is permitted to carry and
where the total distance permitted to be covered by the
vehicle in a day.
Does not exceed 100 kms: Rs. 434.70/-p.q.
Exceeds 100 kms. But does not exceeds 160
kms: Rs. 611.10/-p.q.
Exceeds 160 kms. But does not exceeds 240
kms: Rs.781.20/-p.q.
Exceeds 240 kms. But does not exceeds 320
kms: Rs.913.50/-p.q.
Exceeds 320 kms: Rs.995.40/-p.q.
Passenger vehicles used for Commercial purposes
Description of vehicle
Passenger carrying capacity of 3 or less persons (three

Vehicle permitted to carry more than six passengers and

plying as contract carriages covered under All India
Tourist Permit issued under
Section 88(9) of the
Motor Vehicles Act, 1988 for every passenger other
than the driver and conductor / Attendant which the
vehicle is permitted to carry. : Rs. 3675/-p.q.
Vehicles permitted to carry more than six passengers
and plying as contract carriages on inter state route (on
All India Tourist Permit) on temporary permits under
section 88(8) of the Motor Vehicles Act, 1988 and on
inter state routes (i.e. within the state of Andhra Pradesh
for every passenger) (other than driver) when vehicle is
permitted to carry: Rs. 2625/-p.q.
Contract Carriages plying within the home district and
any one contiguous district for every passenger other
than driver: Rs. 1207.50/-p.q.
Idle contract carriages not covered by any permit
plying on the strength of temporary / special permits
issued under section 87 or sub-section 8 of section 88 of
the Motor Vehicles Act per seat per quarter: Rs.892.50/p.q.
Contract Carriages with a seating capacity of 8 in all to
13 in all covered by intra-state or inter-state permit for
every passenger other than driver the vehicle is
permitted to carry: Rs. 630/-p.q.

Assam

Omni Tourist Bus: Rs. 3500/-p.q.

Deluxe Express Buses with passengers carrying
capacity more than 30 (As specified by Govt. in the

95

State

Bihar

Delhi

Chhattis
garh

Stage Carriage

Contract Carriage

wheelers): Rs. 300/-p.q.

Passenger carrying capacity of 4 person to 6 person (three
wheelers): Rs. 600/-p.q.
4 wheelers vehicle with passenger carrying capacity of 6 or
less person licenced to operate in one city or region: Rs.
750/-p.q.
4 wheelers vehicles with passenger carrying capacity of 6 or
less and licenced to operate all over the State: Rs. 1350/p.q.
Vehicles with passengers carrying capacity of 7 to 12
persons: Rs. 1600/-p.q.
Vehicles with passengers carrying capacity of 13 to 30
persons: Rs. 2200/-p.q.
Vehicles with passengers carrying capacity of more than 30
persons: Rs. 2200+Rs. 23 for every additional seat above 30
per quarter.
3-Wheeler with maximum seating capacity of 4 passengers
(excluding the driver): Rs. 990/-p.a
3-Wheeler with seating capacity of between 6 to 8
passengers (excluding the driver): Rs. 1,920/-p.a.
4-Wheeler with maximum seating capacity of 4 passengers
(excluding the driver): Rs. 1,030/-p.a.
4-Wheeler with seating capacity of 6 to 8 passengers
(excluding the driver): Rs. 4,800/-p.a.
Maximum seating capacity of 5 passengers (excluding the
driver): Rs. 1,250/-p.a.
Seating Capacity more than 5 passengers (excluding the
driver): Rs. 200/- per Seat per annuam
Motor cabs and Omni buses; Seating not more than 4
persons;
Three wheelers: Rs.990/ p.a.
Four wheelers: Rs.1030/- p.a.
Seating capacity more than 4 persons upto 5: Rs.1250/-p.a.
Not more than 2 excluding driver: Rs. 305.00/-p.a.
More than 2 & less than 4 exc. Driver & Conductor. Rs.
605.00/-p.a.
More than 4 & less than 6 exc. Driver & Conductor. Rs.
1,130.00/-p.a.
More than 6 & less than 18 exc. Driver & Conductor. Rs.
1,915.00/-p.a.
More than 18 & above exc. Driver & Conductor. Rs.
1,915.00+ @ 280/- per passenger p.a.
The vehicles run on hire/ returns and used for commutation
of passengers. PER SEAT
The vehicles licensed to carry more than three passengers (
motorcycles/ autorikshaw / three wheelers/ four wheelers):
Rs. 50/-p.q.
The vehicles licensed to carry more than three but less than
six passengers ( three wheelers and four wheelers) ; having
all India permit: Rs. 200/-p.q. and vehicle not having all
India permit: Rs. 150/-p.q.
The vehicles licenced as state carriage / contract carriage
and carrying more than six passengers on city routes/
hinterland; express services: Rs.125/-p.q. and general
services: Rs. 100/-p.q.
The vehicles carrying more than six passengers and
commuting on routes other than city routes
the vehicles providing AC/ deluxe/ express services and
where tye vehicle commutes a distance of up to 100 km
AC/Delux services: Rs. 250/-p.q.
Express service : Rs. 200/-p.q.
For every 10 Km beyond 100 Kms
AC/Deluxe services: Rs. 20/- p.q.
Express services: Rs. 10/- p.q.
The vehicles licenced for general services
Up to 100 kms: Rs. 160/-p.q.
For every 10 km after 100 km: Rs. 10/-p.q.
vehicles from other state licenced for providing AC/Delux/

Transport Departments Notification No. TMV. 251 /

97/01 dt.16.12.97): Rs.2500.00+Rs.25.00 for every
additional seat above 31 per quarter.
All Assam Super Deluxe contract carriage: Rs. 12500/p.q.

Maximum seating capacity of 5 passengers (excluding

the driver): Rs. 1,250/-p.a.
Seating Capacity more than 5 passengers (excluding the
driver): Rs. 200/- per Seat per annuam

For Air Lines or staff vehicles the rates are same as

above of Commercial passengers vehicles.

vehicles having all India tourist permit under motor

vehicles act 1988 section 88 sub section 9 as contract
carriage.
Tourists vehicles other than the maxi cab
AC tourist bus: Rs 950/ seat per month
Maxi cab: Rs 125/.seat per month
The vehicles licensed for carrying more than six
vehicles and running in the state as contract carriage
Maxi cab having capacity more than 6 and less than 12
passengers: Rs 300/ per seat p.q.
Vehicle having capacity for more than 12 passengers
for ordinary buses: Rs 500/seat per month and for
AC/Deluxe Rs 600/seat per month
Such vehicles, running on all India tourist permit issued
by other states under motor vehicle act 1988, section 88
subsection 9
Such vehicle run on regular basis as tourist vehicle: Rs
500/seat per month
Not run as tourist vehicles for more than 6 nays in a
month : Rs 600/seat per month

96

State

Goa
Gujarat

Stage Carriage
express services and
Where the license is countersigned under special contract.
AC/ Deluxe services. For every 10 km Rs 20/seat per month
Express services. For every 10 km Rs 15/seat per month
where licence countersigned without mutual contract
AC/Deluxe services: Rs 40/ seat per month and Rs 20/ seat
for every 10 km
For express services: Rs 40/ seat per month and Rs 15/ seat
for every 10 km
Vehicles from other state licenced for providing general
services and
Where the licence is countersigned under special contract.
For every 10 km Rs 10/seat per month
countersigned without mutual contract Rs 40/ seat per
month and Rs 10/ seat for every 10 km
Reserved coaches
General buses: Rs 160/seat per month
Express buses: Rs 180/seat per month
AC/ Delux bus: Rs 230/seat per moth
Omni bus
general bus: Rs 160/perseat per month
express bus: Rs 180/ per seat per month
AC/Delux bus: Rs 230 per seat per month
NA
Seating capacity up to 9: Rs. 1200/-p.a.
seating capacity exceeding 9: Rs. 1200 + 80 per Seating +
40 per Standing per annual
Taxi Cab
seating capacity upto 4: Rs. 1200
seating capacity exceeding 4 upto : Rs. 1200 + 150 per seat
exceeding 4 per annuam

Haryana

Stage carriage plying for hire and used for the transport of
passengers excluding the driver and conductor: Rs. 550.00
per seat subject to a maximum of 35,000
Stage carriage plying under a permit issued under Faridabad
and Gurgaon City Private Bus Service Scheme, 2004: Rs.
18000.00 for half body bus per annum and 30000.00 for full
body bus per annum

Himacha
l Pradesh

Ordinary/express/semi Deluxe/Deluxe/Airconditioned
Buses (for First Fifteen years from the date of
Registration).- Rs.500/- Per Seat Per Annum(Subject to a
maximum of Rs.35,000/- Per Annum.)
Ordinary/express/semi
Deluxe/Deluxe/Air-conditioned
Buses (After Fifteen years from the date of Registration.Rs.550/- Per Seat Per Annum(Subject to a maximum of
Rs.35,000/- Per Annum.)
Mini Buses (for First Fifteen years from the date of
Registration). - Rs.500/- Per Seat Per Annum (Subject to a
maximum of Rs.25,000/- Per Annum.)
Mini Buses (After Fifteen years from the date of
Registration. - Rs.550/- Per Seat Per Annum (Subject to a
maximum of Rs.25, 000/- Per Annum.)
Bus with seating capacity 8 to 21 Passengers: Rs. 600/-p.q
Bus with seating capacity 22 to 33 passengers: Rs. 1000/p.q.
Bus with seating capacity 34 passengers and more: Rs.
1100/-p.q.
NA

Jammu
&
Kashmir

Jharkhan
d

Contract Carriage

NA
ORDINARY OMNI BUS :
seating capacity upto 12: Rs. 1200/-p.a
Seating capacity exceeding 12, upto 20: Rs. 3000/-p.a.
Seating capacity exceeding 20: Rs. 3600/-p.a.
LUXURY OMNI BUS :
Seating capacity upto 20: Rs. 4620/-p.a.
Seating capacity exceeding 20: Rs. 6000/-p.a.
SLEEPER OMNI BUS :
Seating capacity upto 20: Rs. 9000/-p.a.
seating capacity exceeding 20: Rs. 12000/-p.a.
Contract carriage plying under a permit issued under
Faridabad and Gurgaon City Private Bus Service
Scheme, 2004: 18000.00 for half body bus per annum
and 30000.00 for full body bus per annum
Contract carriages owned by any religious institution
and used by exclusively for the carriage of its personals
or devotees as the case may be: Rs. 200.00/-p.a. per seat
Maxi-cabs plying on contract carriage for hire or reward
and used for the transport of passengers excluding the
driver: Rs. 200.00 per seat
Motor-cabs plying on contract carriage for hire or
reward and used for the transport of passengers
excluding the drivers. Rs. 100.00/- p.a per seat
Maxi Cab: Rs. 750/- Per Seat Per Annum( Subject to a
maximum of Rs. 15,000/- Per Annum)
Motor Cab: Rs. 350/- Per Seat Per Annum( Subject to a
maximum of Rs. 10,000/- Per Annum)
Auto Rickshaw: Rs.200/- Per Seat Per Annum( Subject
to a maximum of Rs. 5,000/- Per Annum)
Contract Carriage Buses: Rs.1000/- Per Seat Per Annum
( Subject to a maximum of Rs. 35,000/- Per

Taxis/Auto Rickshaws Upto 5 seats: Rs.250/-p.q.

More than 5 seats: Rs. 375/-p.q.

NA

97

State

Stage Carriage

Contract Carriage

Karnatak
a

Motor Vehicles other than those plying for hire and used for
Transport of passengers.
Vehicles permitted to carry (excluding driver)
Note: in Notification No. HTD 74 TMT 2001 dated
02.08.2002, the tax payable in respect of Motor cabs (Meter
taxi) permitted to carry not more that 5 passengers and
complying with the requirements of Rule 128 of the KMV
Rules, 1989, reduced to Rs. 60/0 per quarter w.e.f.
01.04.2002 : Rs. 60/-p.q.
Not more than five passengers (motor cab) for every
passenger: Rs. 100/-p.q.
Vehicles permitted to carry more than 12 passengers (other
than the driver and conductor) and plying exclusively on
routes within the limits of cities and towns notified by the
Government, for every passenger which the vehicle is
permitted to carry. : Rs.300/-p.q.
For every standing passenger, which the vehicle is
permitted to carry : Rs. 100/-p.q.
Vehicles permitted to carry more than 12 passengers (other
than the driver and conductor)
For every seated passenger, which the vehicle is permitted
to carry: Rs. 500/-p.q.
For every standing passenger which the vehicle is permitted
to carry: Rs. 100/-p.q.
Vehicles permitted to carry six passengers (Motor Cabs and
maxi cabs):Having a floor area not exceeding six square meters, for
every square meter.: Rs. 750/-p.q.
having a floor area exceeding six square meters for every
square meter.: Rs. 700/-p.q.

Kerala

Ordinary Services- For every seated passenger(other than

driver and conductor) which the vehicle is permitted to
carry- Rs. 600/- Per Quarter
Fast Passenger and Express Services for every seated
passenger (other than driver and conductor) which the
vehicle is permitted to carry- Rs. 690/- Per quarter.
For every Standing passenger the vehicle ( whether
ordinary, fast passenger or express service) is permitted to
carry- Rs. 210/- Per Quarter
For every Standing passenger if the vehicle with only
city/town permit( whether ordinary, fast passenger or
express service) is permitted to carry- Rs. 150/- Per Quarter

Madhya
Pradesh

Vehicle Permitted to carry more than 6 passengers and

plying as stage carriage on city routes/on adjacent area as
notified by the State GovernmentRs.80/- Per Quarter.
In respect of vehicle permitted to ply as express service for
every passengers which the vehicle is permitted to carry.Rs. 60/- Per Quarter
In respect of vehicles permitted to ply as air-conditioned
service or deluxe or express service for every passengers
which the vehicle is permitted to carry and where the total
distance permitted to be covered by the service in a dayDoes not exceeds 100 KM (for air conditioned/deluxe
service) Rs. 250/- Per Seat Per Month
Does not exceeds 100 KM (for express service)- Rs.200/Per Seat Per month
There after for each 10 KM or part thereof- (for air

Motor vehicles (Contract carriages) plying for hire or

reward and constructed or adapted to carry more than 12
passengers (excluding driver and conductor/attendant)
and complying with Rule 151(2) of the Karnataka
Motor Vehicles Rules, 1989 for every passenger. : Rs.
1000/-p.q.
Motor vehicles (Contract carriages) plying for hire or
reward and constructed or adapted to carry more than 12
passengers (excluding driver and
conductor/attendant)other than those liable to be taxed
under item 5(a) (i) for every passengers. : Rs. 2500/-p.q.
Motor Vehicles plying for hire or reward and
constructed or adapted to carry more than 12 passengers
(excluding driver and conductor/attendant) and
complying with rule 151(2) of the Karnataka Motor
Vehicles Rules, 1989 and covered by Special permit
issued under section 88(8) of the Motor Vehicles Act,
1988 for every passenger. : Rs. 700/-p.q.
Motor Vehicles (luxury buses) plying for hire or reward,
constructed or adapted to carry more thn 12 passengers
(excluding driver and conductor/attendant) and
complying with Rule 128 of Central Motor Vehicles
Rules, 1989 or Motor Vehicles with permits granted
under the Motor Vehicles (All India permit for Tourist
Transport Operators) Rules,1993,plying for hire or
reward permitted to carry more than twelve passengers
(Excluding driver and conductor/attendant). for every
passenger: Rs. 2500/-p.q.
Campers van used for hire or reward based on floor area
for every square meter : Rs. 4700/-p.q.
Motor Vehicles registered as sleeper coaches and
permitted to carry more than 12 passengers (excluding
the driver and conductor/attendant) for every sleeper
which the vehicles is permitted to carry- : Rs. 3000/-p.q.
Not more than two passengers (Auto rickshaw)
Three passengers (Auto rickshaw); Petrol driven:
Rs.120/-p.q. and Diesel driven: Rs. 130/-p.q.
More than 3 passengers but not more than 6 passengers
other than tourist motor cabs (motor cab) Petrol driven:
Rs.240/-p.q., and Diesel driven: Rs. 260/-p.q
More than 6 passengers but not more than 12 passengers
for every passenger Petrol driven: Rs.310/-p.q., and
Diesel driven: Rs. 330/-p.q
Vehicles permitted to operate within the State more than
12 passengers but not more than 20 passengers for every
passenger.
More than 20 passengers, for every passenger Petrol
driven: Rs.530/-p.q., and Diesel driven: Rs. 750/-p.q
Vehicles operating Inter-State more than 12 passengers,
for every passenger: Rs.1540/-p.q.
Tourist motor cabs Petrol driven: Rs.320/-p.q. Diesel
driven: Rs. 340/-p.q
Vehicle permitted to carry more than six passengers and
plying as contract carriage covered by all India tourist
permit issued by Madhya Pradesh State under subvehicles (9) of section 88 of the motor vehicle Act. 1988
for which the vehicle is permitted to carryFor maxi cab vehicle having capacity Exceeding six and
upto
12( excluding driver)- Rs 150/- per seat per month or
lump sum
tax at the rate of 10 percent of the cost of a new vehicle
recoverable in two equal installments in a year. And 5
percent of the cost of older vehicles for which life time
tax has already been paid.
For vehicles having more than twelve seats (excluding
driver)Rs 800/- per seat per month

98

State

Stage Carriage

Contract Carriage

conditioned/deluxe service) Rs. 20/- Per Seat Per Month

There after for each 10 KM or part thereof- (for express
service) Rs. 15/- Per Seat Per Month
In respect of vehicles permitted to ply as ordinary service
for every passenger which the vehicle is permitted to carry
and where the total distance permitted to be covered by a
vehicle in a dayDoes not exceeds 100 KM- Rs. 160/- Per Seat Per Month
There after for each 10 KM or part thereof- Rs. 10/- Per
Seat Per Month

Vehicle permitted to carry more than six passengers and

playing with in the state as contract carriage for each
seat (other than the driver) which the vehicle is
permitted to carryFor maxi cab vehicle having seating capacity exceeding
six
and upto 12 (excluding driver)- Rs.300/- Per Seat Per
Quarter
For vehicle having more than twelve seat (excluding
driver)For ordinary bus- Rs.500/- Per Seat Per Month
For air-conditioned bus /deluxe bus - Rs.600/- Per Seat
Per Month
Ordinary Buses-Rs.1500/-per seat per annum
Tourist Buses-Rs.5500/- per seat per annum
Air-condition Buses Rs.6500/-per seat per annum
Sleeper Coaches (A/C) Rs.7500/-per seat per annum
Non-A/C Sleeper Coaches Rs.5000/-per seat per
annum
School buses-1/3rd of the tax leviable for contract
carriage buses
Buses on Special permits Rs.5000/-- per seat per
annum
Mini Bus (>12 seats <23): Rs.240.00/-p.q.
Jeep Taxi (maxi cab): Rs.240.00/-p.q.
Jeep Taxi (<12 seats & other taxis): Rs.200.00/-p.q.
Tempo: Rs.125.00/-p.q.
Auto Rickshaw: Rs. 75.00/-p.q.

Maharas
htra

Stage Carriage Rs.71/- per seat per annum+ Rs. 18/- per
standee per annum

Manipur

Motor Vehicles fitted with pneumatic tyres

IX. Motor Vehicle plying for hire or reward for the
conveyance of passengers and light personal luggage of
passenger under this Article:
(a) Licence to carry in all not more than two (excluding
driver) & conductor) Rs.100/-p.a
(b) Licence to carry in all more than two but not more than
four passengers (excluding driver & conductor): Rs.200/p.a.
( c ) Licence to carry in all more than four but not more
than six passengers (excluding driver & conductor):
Rs.300/-p.a.
(d) Licence to carry in all more than six but not more than
eight passengers (excluding driver & conductor): Rs.400/p.a.
(e) Licence to carry in all more than eight but not more
than twelve passengers (excluding driver & conductor):
Rs.600/-p.a.
(f) Licence to carry in all more than twelve but not more
than sixteen passengers (excluding driver & conductor):
Rs.1000/-p.a.
(g) Licence to carry in all more than sixteen passengers
(excluding driver & conductor): The rate specified in (f)
above plus Rupees eighty for every additional passenger
every year (or Rs.20/-every quarter) beyond 16 passengers.

Meghala
ya

Mini Bus (upto 30 seats) for every seat authorised to carry

passenger: Rs.25/-p.q.
Omni Bus (above 30 seat) for every seat authorised to carry
passenger: Rs.20/-p.q.

Mizoram

Auto Rickshaw Rs. 250/-p.a

Buses Rs. 100/-per seat annual (excluding two seats)
Night buses Rs. 150/- per seat annual (excluding two seats)
NA

Nagalan

(Permit issued by STA for State permit or National

Permit)
Tourist Taxi Cabs (authorised to carry not more than 6
passengers).: Rs. 360/-p.q.
Tourist Maxi Cabs (authorised to carry more than 6
but not more than 12 passengers): Rs. 750/Tourist Buses For every seat authorized to carry
passenger: Rs. 30/-p.q.
Auto Rickshaws, Jeeps, Taxis - (Permit issued by
RTAs)
Auto rickshaws: Rs. 50/-p.q.
Taxi Cabs: Rs. 115/-p.q.
Maxi Cabs: Rs. 500/-p.q.
Jeeps: Rs. 45/-p.q.
Station wagons: Rs. 175/-p.q.
Tourist Taxi to carry 5 persons Rs. 2000/-p.a
Taxi to carry 5 persons (4+1) Rs. 700/-p.a
Maxi cab Rs. 2000/-p.a.
NA

99

State
d
Orissa

Punjab

Rajastha
n

Stage Carriage
Stage Carriages - Tax for seating person excluding driver &
conductor plying for hire and used for conveyance of
passengers (Tax per seating per annum+ Addl.. tax per
seating per annum)
Kms covered per day upto 160 kms as
Ordinary: Rs.172/- p.a. + Rs.576/-p.a.
Express: Rs.172/- + Rs.895/Deluxe: Rs.172/- + Rs.1164/Kms covered per day 161-240 Kms as
Ordinary: Rs.196/- p.a. + Rs.720/Express: Rs.196/- + Rs.1120/Deluxe: Rs.196/- + Rs.1456/Kms covered per day 241-320 Kms as
Ordinary: Rs.245/- + Rs.955/Express: Rs.245/- + Rs.1550/Deluxe: Rs.245/- + Rs.2015/Kms covered per day exceeding 320 kms as
Ordinary: Rs.294/- + Rs.1146/Express : Rs.294/- + Rs.1746/Deluxe: Rs.294/- + Rs.2270/Per Standee: Rs.152/- p.a.
Ordinary Bus: Rs.650/- Per Seat per annum Road Tax plus
SRT0.0518 paisa per seat per KM per day
Express Bus: Rs.650/- Per Seat per annum Road Tax plus
SRT 0.0719 paisa per seat per KM per day
Semi Deluxe Bus: Rs.650/- Per Seat per annum Road Tax
plus SRT 0.0863 paisa per seat per KM per day
Deluxe Bus: Rs.650/- Per Seat per annum Road Tax plus
SRT 0.1150 paisa per seat per KM per day
A.C Bus: Rs.650/- Per Seat per annum Road Tax plus SRT
0.1438 paisa per seat per KM per day
Mini Bus: Rs.7500/- p.a. Road Tax plus SRT Rs. 20,000/
Year

Purchased as Complete Vehicle:

Cost of vehicle upto Rs. 4 lakh 4.5% of the cost of
vehicle (maximum of Rs. 12000) (Annual Road Tax) +
Special Road Tax as applicable
Cost of vehicle above Rs. 4 lakh .7.0% of the cost
of vehicle (maximum of Rs. 12000) ( Annual Road
Tax) + Special Road Tax as applicable
Purchased as Chassis :
Cost of Chassis upto Rs. 4 lakh 5.0% of the cost of
vehicle (maximum of Rs. 12000) ( Annual Road Tax) +
Special Road Tax as applicable
Cost of the Chassis above Rs. 4 lakh 10.0% of the
cost of vehicle (maximum of Rs. 12000) ( Annual
Road Tax) + Special Road Tax as applicable
Special Road Tax
Stage carriage plying exclusively within municipal
limits/U.I.T. Limits (Annual)
Cost of vehicles
Purchased as complete vehicle
Cost of vehicle 0 to 2 lacs @1.2% of cost of vehicles
Cost of vehicle 2.01 to 4.00 lacs @ 1.5% of cost of vehicles
Cost of vehicle More than 4 lacs @ 1.5% of cost of vehicles
Purchased as a chassis
Cost of chassis 0 to 2 lacs @0.7% of cost of chassis
Cost of chassis 2.01 to 4.00 lacs @ 0.7% of cost of chassis
Cost of chassis More than 4 lacs @ 0.8% of cost of chassis
Note: Maximum limit of road tax + SRT for vehicles with
seating capacity of 26 in all is Rs. 4,000, 27 to 32 in all is
Rs. 5,000 and for more than 32 in all is Rs. 10,000.
Monthly rate of special road tax on stage carriage plying
exclusively on sub-urban routes:

Contract Carriage
Tax per seating per annum+ Addl.. tax per seating per
annum
Seating capacity upto 3: Rs. 148/-p.a.
Seating capacity between 4 25: Rs.307/- p.a. + Rs.
413/- p.a.
Seating capacity exceeding 25: Rs. 768/-p.a. + Rs.
1032/-p.a.

1 to 15 seats: Rs.200/Seat Road Tax per year plus SRT

Rs.800/- per day for ordinary, Rs. 1200/- per day for
deluxe, and Rs.1600/- per day for A.C.
16 to 30 seats: Rs.200/Seat Road Tax per year plus SRT
Rs.1200/- per day for ordinary, Rs. 1600/- per day for
deluxe, and Rs.2000/- per day for A.C.
31 to 54 seats: Rs.200/Seat Road Tax per year plus SRT
Rs.1600/- per day for ordinary, Rs. 2000/- per day for
deluxe, and Rs.2400/- per day for A.C.
Vehicle More Than 6 seats: Rs.39.05 /Seat Road Tax
per year plus SRT Rs. 10000/-p.a. for ordinary,
Rs.20000/-p.a. for Deluxe, and Rs.25000/-p.a. for A.C.
Tourist Bus: Rs.650/Seat Road Tax/ Year plus SRT Rs.
200000/-p.a. for ordinary, Rs.250000/- p.a. , and
Rs.288000/-p.a.
Lump sum tax on three wheelers
Seating Capacity 3 in all : 8% of the cost of
vehicle/chassis (Rs. 3000/- maximum)
Seating Capacity 4 in all: 9% of the cost of
vehicle/chassis (Rs. 6000/- maximum)
Seating Capacity 5 in all: 10% of the cost of
vehicle/chassis (Rs. 8000/- maximum
Road tax on four wheelers
Purchased as Complete Vehicle:
Cost of vehicle upto Rs. 4 lakh 4.5% of the cost of
vehicle (maximum of Rs. 12000) (Annual Road Tax) +
Special Road Tax as applicable
Cost of vehicle above Rs. 4 lakh .7.0% of the cost
of vehicle (maximum of Rs. 12000) ( Annual Road
Tax) + Special Road Tax as applicable
Purchased as Chassis :
Cost of Chassis upto Rs. 4 lakh 5.0% of the cost of
vehicle (maximum of Rs. 12000) ( Annual Road Tax) +
Special Road Tax as applicable
Cost of the Chassis above Rs. 4 lakh 10.0% of the
cost of vehicle (maximum of Rs. 12000) ( Annual
Road Tax) + Special Road Tax as applicable
Special Road Tax
Rate of special road tax for vehicles plying on other
than tourist permits:
Purchased as vehicle
Seating capacity Upto 5 in all Special Road tax @
0.80% of cost
Seating capacity 6 to 9 in all Special Road tax @ 1.75%
of cost
Seating capacity 10 in all Road tax @ 3.0% of cost

100

State

Sikkim

Stage Carriage

Contract Carriage

Seating Capacity upto 27

Purchased as chassis @ 0.73% of the cost
Purchased as vehicle @ 0.53% of the cost
Seating Capacity more than 27
Purchased as chassis: Ordinary@0.73% of the cost and
Deluxe @ 0.37% of the cost
Purchased as vehicle: Ordinary @ 0.50% of the cost and
Deluxe @ 0.25% of the cost
Monthly rate of SRT on stage carriages plying on rural
routes of the state other than those owned by a fleet owner:
Distance required to be covered by the service in one day
Upto 200 Km. 0.20% of the cost of chassis
201 to 400 Km. 0.25% of the cost of chassis
More than 400 Km. 0.30% of the cost of chassis
Monthly rate of special road tax on stage carriage of the
state other than owned by a fleet owner:
Distance required to be covered per day Upto 150 Km.
Seating Capacity 47 in all : Purchased as chassis @0.450%
and Purchased as vehicle @ 0.315%
More than 47 in all : Purchased as chassis @0.0.550% and
Purchased as vehicle @ 0.0.385%
Distance required to be covered per day More than 150 Km.
Seating Capacity 47 in all : Purchased as chassis @0.130%
for additional 25 km or part thereof in addition to rates as
specified above Purchased as vehicle @ 0.091% for
additional 25 km or part thereof in addition to rates as
specified above
More than 47 in all : Purchased Purchased as chassis
@0.180% for additional 25 Km or part thereof in addition
to rates as specified above Purchased as vehicle @ 0.126%
for additional 25 Km or part thereof in addition to rates as
specified above
Monthly rate of SRT on stage carriage buses owned by a
fleet owner
Stage carriages other than those plying exclusively within
municipal limits: 2.05% of the cost of the chassis of entire
fleet of vehicles used or kept for use a stage carriage in the
fleet, including vehicles hired by the owner during the
month to which the tax relates subject to maximum limit of
Rs. 25000 per month per vehicle.
1.05% of the costs of vehicle of entire fleet of vehicles used
or kept for use a stage carriage in the fleet, including
vehicles hired by the owner during the month to which the
tax relates subject to maximum limit of Rs. 25000 per
month per vehicle.

Seating capacity 11 to 14 in all Special Road tax @

6.0% of cost
Seating capacity 15 to 22 in all Special Road tax @9%
of cost
Seating capacity 23 to 32 in all Special Road tax @12%
of cost
Seating capacity 33 to 42 in all Special Road tax @16%
of cost
Seating capacity More than 42 in all Special Road tax
@18% of cost
Rate of special road tax for vehicles plying on other
than tourist permits:
Purchased as Chassis
Seating capacity 11 to 14 in all Special Road tax @
6.0% of cost
Seating capacity 15 to 22 in all Special Road tax @12%
of cost
Seating capacity 23 to 32 in all Special Road tax @18%
of cost
Seating capacity 33 to 42 in all Special Road tax @21%
of cost
Seating capacity More than 42 in all Special Road tax
@24% of cost
Rate of special road tax on vehicles plying on Tourist
Permits of this State:
Purchased as vehicle
Seating Capacity upto 5 in all: @0.80% of cost
Seating Capacity 6 to 9 in all: @1.75%
Seating Capacity 10 in all: @3.0%
Seating Capacity 11 to 14 in all: @6.0%
Seating Capacity 15 to 22 in all: @ 14%
Seating Capacity 23 to 32 in all: @ 22%
Seating Capacity More than 32 in all: @ 22%
Four wheeled sleeper coaches
Seating Capacity 23 to 32 in all: @ 20%
Seating Capacity 33 to 42 in all: @ 24%
More than 42 in all: @ 28%
Purchased as chassis
Seating Capacity 11 to 14 in all: @6.0%
Seating Capacity 15 to 22 in all: @ 16%
Seating Capacity 23 to 32 in all: @ 30%
Seating Capacity More than 32 in all: @ 36%
Four wheeled sleeper coaches
Seating Capacity 23 to 32 in all: @ 30%
Seating Capacity 33 to 42 in all: @ 36%
More than 42 in all: @ 42%

Maxi cab, each seat based on seating capacity noted in

the registration certificate provided that the maxi cab
shall have a state carriage permit duly issued by the
concerned Transport Authority: : Rs. 230.00/- p.a.
For other vehicles, each seat based on the seating
capacity noted in the registration certificate: Rs. 125.00/p.a.

seating capacity upto 4 seats

For three wheelers: Rs. 260.00/-p.a.
For meter taxi
: Rs. 600.00/-p.a.
For vehicle other than meter taxi: Rs. 800.00/-p.a.
Seating capacity more than 4 seats
Meter taxi upto 5 seats: Rs. 800.00/-p.a.
other than meter taxi: Rs. 1050.00/-p.a.
For five seats plus: Rs. 225.00 for each additional seat
beyond five.
seating capacity of 4 persons including driver: Rs.
3250/Seating capacity beyond 4 upto 7 persons: Rs. 3250/for 4 plus Rs. 250/-including driver for every
additional seat upto 7 including driver.

101

State

Stage Carriage

Tamil
Nadu

Plying exclusively within the Chennai Metropolitan area:

Rs.80/- p.q. plus Rs.20/- p.q. surcharge per seat
Town Service Quarterly : Rs.325/- plus 10% surcharge per
seat
Mofussil Service Quarterly : Rs.400/- plus 25% surcharge
per seat
Express Service Quarterly : Rs.400/- plus 25% surcharge
per seat
Mini Bus Based on Seating Capacity : Rs.160/- + 25%
Surcharge per seat per seat Quarterly Rs.100/- plus 25%
surcharge in Ghat Section.
Annual tax on vehicle with seating capacity
Not less than 8 but not more than 26: Rs. 425.00 for 8 plus
Rs. 50.00 every seat beyond 8 and upto 26
More than 26 but not more than 52.: Rs. 1420.00 for 27
plus Rs. 42.00 for every addl. seat beyond 27.

Tripura

U.P

Seating capacity not more than three persons: Rs.95/-p.q.

Seating capacity four persons: Rs.185/-p.q.
Seating capacity for more than four but not more than six;
Three wheelers: Rs.185/-p.q.and the other: Rs.230/-p.q.
With seating capacity for more than six persons but not
more than twelve persons exclusive of the driver: if
intended for use on A-Class route; Rs. 350/-p.q. if
intended for use on B-Class route; Rs. 201/-p.q.

Contract Carriage
Omni Bus: Rs.3000/- per seat per quarter
Maxi cab: Rs.275/- per seat per quarter
Maxi cab (6 +1): Rs.500/- per seat per quarter
Tourist Motor Cab: Rs.6500/- for 5 years
Motor Cab (Ordinary): Rs.4000/- for 5 years
Autorickshaw: Rs.1400/- for 5 years
Share Auto rickshaw: Rs.4000/- for 5 years

Annual tax on vehicle with seating capacity

Not more than 3 passengers: Rs.150.00
Not more than 5 passengers: Rs.400.00
More than 5 passengers: Rs. 400.00 for 5 plus Rs.
40.00 for every additional seat beyond 5
Tourist Cab upto 6 seats: Rs.500.00
Tourist vehicle with more than 6 seats and upto 12
seats: Rs.1500.00
Tourist Bus with more than 12 seats but upto 36 seats:
Rs.5200.00
Motor Cab:For Vehicles with seating capacity of 3
persons excluding driver: Rs. 300/-p.q.
For vehicles with seating capacity of more than 4
persons but not more than 6 persons excluding driver:
Rs. 600/-p.q.
For vehicles excluding above: Rs.200/-p.q.
Maxi Cab: Rs. 10000/-p.q.
For vehicles with seating capacity for more than 12
persons but not more than 20 persons exclusive of the
driver and conductor: Rs. 16588/-p.q.

With seating capacity for more than twelve persons but not
more than twenty persons exclusive of the driver: if
intended for use on A-Class route; for the first twelve
seats-Rs. 350/-p.q. and for every additional seats- Rs.30/p.q. if intended for use on B-Class route; for the first
twelve seats- Rs. 201/-p.q. and for every additional

For vehicles with seating capacity for more than 20

persons but not more than 41 persons exclusive of the
driver and conductor: Rs.22882/-p.q.
For vehicles with seating capacity for

seats- Rs. 8/-p.q.

With seating capacity for more than twenty persons but not
more than thirty five persons exclusive of the driver: if
intended for use on A-Class route; for the first twenty
seats- Rs. 590/-p.q. and for every additional seats- Rs. 35/p.q. if intended for use on B-Class route; for the first 20
seats- Rs. 265/-p.q. and for every additional seats- Rs.
11.50/-p.q.
With seating capacity for more than thirty five persons
exclusive of the driver: if intended for use on A-Class
route; Rs. 1115.00+ Rs. 45.00 for every seat in excess of
thirty five seats , if intended for use on B-Class route; Rs.
438.00+ Rs. 17.00 for every seat in excess of thirty five
seats
Rates of Additional Tax on each seat:
Provided that the additional tax on a stage carriage
operating within the limits of a corporations or a
municipality shall be Rs. 4,620.00 per quarter in respect of
a stage carriage having not more than 35 seats and Rs.
6,600.00 per quarter in respect of a stage carriage having
more than 35 seats.
Distance run in a Quarter (In Kms)
Upto 5700 On A class routes Rs. 256/-p.q. and on B
class routes Rs.288/-p.q
Exceeding 5700 but not exceeding 7200 On A class routes
Rs. 325/-p.q. and on B class routes Rs. 361/-p.q.
Exceeding 7200 but not exceeding 9000 On A class routes
Rs. 376/-p.q. and on B class routes Rs. 393/-p.q.

more than 42 persons and above exclusive of the driver

and conductor.: Rs.29815/-p.q.
For Deluxe Bus: Rs.36042/-p.q.
For Air-Conditioned Bus: Rs.41744/-p.q.

102

State

Uttaranc
hal

West
Bengal

Stage Carriage
Exceeding 9000 but not exceeding 11700 On A class
routes: Rs. 458/-p.q. and on B class routes Rs. 511/-p.q.
Exceeding 11700 but not exceeding 14400 On A class
routes: Rs. 565/-p.q. and on B class routes Rs. 630/-p.q.
Exceeding 14400 but not exceeding 18000 On A class
routes Rs. 705/-p.q. and on B class routes Rs.787/-p.q.
Exceeding 18000 On A class routes Rs. 705.00 + 265.00
for every 5700 kms. Per quarter or part thereof and on B
class routes Rs. 787.00 + 288.00 for every 5700 kms. or
part thereof
Seating capacity not more than three persons: Rs.95/-p.q.
Seating capacity four persons: Rs.185/-p.q.
Seating capacity for more than four but not more than six;
Three wheelers: Rs.185/-p.q.and the other: Rs.230/-p.q.
With seating capacity for more than six persons but not
more than twelve persons exclusive of the driver: if
intended for use on A-Class route; Rs. 350/-p.q. if
intended for use on B-Class route; Rs. 201/-p.q.
With seating capacity for more than twelve persons but not
more than twenty persons exclusive of the driver: if
intended for use on A-Class route; for the first twelve
seats-Rs. 350/-p.q. and for every additional seats- Rs.30/p.q. if intended for use on B-Class route; for the first
twelve seats- Rs. 201/-p.q. and for every additional seatsRs. 8/-p.q.
With seating capacity for more than twenty persons but not
more than thirty five persons exclusive of the driver: if
intended for use on A-Class route; for the first 20 seatsRs. 590/-p.q. and for every additional seats- Rs. 35/-p.q. if
intended for use on B-Class route; for the first 20 seatsRs. 265/-p.q. and for every additional seats- Rs. 11.50/-p.q.
With seating capacity for more than thirty five persons
exclusive of the driver: if intended for use on A-Class
route; Rs. 1115.00+ Rs. 45.00 for every seat in excess of
thirty five seats , if intended for use on B-Class route; Rs.
438.00+ Rs. 17.00 for every seat in excess of thirty five
seats
Rates of Additional Tax on each seat:
Upto 4500 kms; Plain routes Rs.154.00/- p. q. per seat and
Hill Routes Rs. 146.00/-p.q. per seat
For each km exceeding 4500 kms Plain routes Rs.154.00/p. q. per seat and Hill Routes Rs. 146.00/-p.q. per seat
+0.04 per seat per km to be added after 4500 kms.
For a vehicle operating within the limits of a corporation or
municipality Upto 35 Seats: Rs. 4620.00/-p.q. per seat and
More than 35 seats Rs. 6600/-p.q. per seat
Maxi cab: Rs.230 per passenger
Other :Rs. 125 per passenger

Contract Carriage

Additional Tax
Three Wheeler with seating capacity not more than six
persons excluding driver: Rs. 30/- per Seat per Month
Taxicab: Rs.85/- per Seat per Month
Maxicab: Rs.125/- per Seat per Month
For a vehicle with seating capacity more than 12
persons exclusive of driver and conductor: Rs.160/per Seat per Month
Semi Deluxe Bus: Rs.200/- per Seat per Month
Deluxe Bus: Rs.225/- per Seat per Month
Air Conditioned Bus: Rs.255/- per Seat per Month

Taxi: Seating capacity up to 4: Rs.600/-p.a

3 wheeler: seating capacity up to 4: Rs.260/-p.a.
Others: seating capacity up to 4: Rs. 700/-p.a.
Above 4: Rs. 900/-p.a.

103

5
Toll Charges for
Financing of Highways
Toll charges or toll taxes are user charges upholding the concept of
the user-pays. Tolls are paid only when a particular facility is used and
the tolls paid cover operating and maintenance costs as well as debt
retirement of the facility. It is a form of pay-as-you use. This involves less
cross-subsidy amongst road users and makes the incidence of tolls more
visible and real to the user. Further, it permits rapid construction, inclusion
of adequate operating and maintenance costs in the toll rates and the use of
tolls as a form of congestion pricing.
Introduction
Developed and developing countries are finding it increasingly
difficult to maintain their road systems and provide for road expansion.
This is mainly because prevalent sources of funding are inadequate to
meet the growing requirements. Given the persistent pressure on
resources, often the need has been felt to explore more extensive use of
alternatives i.e. unconventional sources of funding for road construction
and maintenance. One such alternative is toll financing of roads which is
in limited use in the United States and in some countries of Europe and
Asia. A significant number of toll roads have been built since World War
II particularly in France, Italy, Japan, Spain, Portugal and the United
States. In these countries, toll roads actually form a system of roads which,
in general, is crucial, though its proportion in the total road system is often
minimal.
Historically, toll road project financing has been based on
estimates of future toll revenue. However, increasing cost and rising

104

interest rates have placed severe restrictions on this approach. Few recent
projects have been financed without support or participation from other
sources of revenue. Thus, traditional concepts have changed and also
continue to change to meet new conditions and requirements. Against the
background of the toll road experience in several countries, India has also
started using this method of financing road network.
Road Network Scenario
India has a vast network of National Highways (NHs) totaling
70,548 km and connecting important towns, cities, ports and industrial
centres of the country. For the purpose of management and administration,
roads in India are divided into National Highways (NH), State Highways
(SH), Major District Roads (MDR), Other District Roads (ODR), and
Village Roads (VR) 1.
The National Highways are intended to facilitate medium and long
distance inter-city passenger and freight traffic across the country. The
State Highways are supposed to carry the traffic along major centres
within the State. Other District Roads and Village Roads provide villages
accessibility to meet their social needs as well as the means to transport
agriculture produce from village to nearby markets. Major District Roads
provide the secondary function of linkage between main roads and rural
roads.
National Highways constitute only about 2% of the road network
but carry about 40% of the total road traffic. While the traffic on National
Highways has been growing at a rapid pace, it has not been possible for
the Government to provide matching funds due to competing demand
from other priority sectors. This has led to a large number of deficiencies
in the network. Many sections of the national highways are in need of
capacity augmentation by way of widening grade separation, construction
of bypass bridges and expressways etc. Many bridges are in need of
replacement. The traffic movement on national highways is also hindered
due to a large number of rail-road crossings where road traffic is forced to
stop due to the frequent closures. The overall scenario on the highways has

The Road network in India is extending to 33 lakh kms. The different type of roads are
as follows: Expressways 200 km, National Highways 70,548 km, State Highways
1,31,899 km, Major District Roads 4,67,763 km, and Rural and Other roads 26,50,000
km.

105

led to economic losses due to the longer time taken by the vehicles, rising
vehicle operating costs, and dissipation of human energy while driving.
The Government of India, in consonance with its general policy of
liberalization (globalization) of the country's economy now welcomes
private investment in National Highways. This has been done to motivate
the inflow of resources for the development, maintenance and
management of national highways and to improve their efficiency,
productivity and quality of service. This will also bring in competitiveness
in providing highway services to the road users. The Indian Government
hopes that this measure will facilitate improvement of the existing
highways and bring in the latest technology and improved management
techniques. The users are already accustomed to pay fee for the use of
bridges on national highways for the last two decades. Other highway
projects have also been awarded to the private sector recently and the
experience gained in the process has been utilized in framing these
guidelines.
Existing System of Management of Roads: Roads are primarily
funded through budgetary allocations. Central Government provides funds
for national highways and State Government for other roads. Presently the
total allocations, Central and State, available for road development are to
the tune of Rs 110 billion, which is just 42% of the total transportation
revenue received by the Government. This indicates the inefficiency of our
system which consumes 58% of the total revenue received by the
transportation sector. The amount will be used for partly financing the Rs
54,000 crore (at 1999-2000 prices) project, which entails four-six laning of
13,252 km of national highways in the country. The remaining portion,
amounting to Rs 14,000 crore, would come from market borrowings and
through private participation. National Highway Authority of India
(NHAI) would raise Rs 13,500 crore through market borrowings over the
next four years, of which Rs 663 crore have already been raised through
two tranches of capital gains exempt bonds.
Development of roads and highways has been taken up by the
Union Government as a major step in augmenting the infrastructure of the
country. For the financing of the Rs 54,000 crore National Highway
Development Project (NHDP), the NHAI has been authorized to issue
bonds.
The development, maintenance and management of National
Highways are carried out by the Central Government under the provisions

106

of National Highways Act, 1956. The Act has been amended in June, 1995
to permit private sector participation.
The National Highways Act, 1956, empowers the Central
Government to enter into agreement with any person capable of financing
with his own resources the development and maintenance of National
Highways. Upon expiry of the concession period, the right of the person to
collect the fee and his obligation to operate and maintain the project will
cease and the facility will stand transferred to the Central Government.
The Central Government has decided that the policy of
privatization of National Highways will be implemented by the National
Highways Authority of India (NHAI). In exceptional cases, the Central
Government may also assign the functions of the implementing agency
(IA) to the States. NHAI was established under the National Highways
Authority of India Act, 1988, but was operationalised in February 1995. It
is an autonomous body with executive responsibility for the development,
maintenance and operation of National Highways and associated facilities
vested in it by the Ministry of Surface Transport. It is intended to take over
the management of the entire National Highways on an agency basis in a
phased manner.
Statutes and Institutional Structure: In order to improve the road
network on a country wide level, the NHDP was set up by the Prime
Ministers Office (PMO). The NHDP is the largest highway project ever
undertaken by the country to be implemented by the NHAI. The project
aims to develop the Golden Quadrilateral and the North South as well as
the East West corridor as these are the high volume sectors carrying a
substantial portion of the road traffic in India.
Presently, National Highways are being developed, maintained and
managed under an agency system. The execution of works and day-to-day
management are looked after by the Public Works Department and those
in the border areas are developed and maintained by the Border Roads
Organization (BRO). The Ministry of Surface Transport (MOST), Govt. of
India, has the overall responsibility (including planning, budgeting and
standardization) for maintaining the National Highways.
Management of Highways Built through Private Investment: For
the purpose of proper management of the highway stretch built through
private investment, the enterprise will have powers to regulate and control
the traffic on the highway stretch. This is in accordance with the

107

agreement between the Government and the enterprise. In order to reduce

interference from other authorities, no sales tax and octroi barriers will be
established on the highway stretch, but properly designed unified check
barriers may be allowed at the inter-state borders located outside the rightof-way with proper entry/exit layouts.
Regulatory Framework: The Implementation Agency will carry
out the regulatory functions. The upper limit of the user fee applicable for
the initial years will be stipulated in the agreement together with the fee
revision formula applicable for the subsequent years; the appropriate upper
limit of fees shall be notified by the Government from time to time. The
enterprise will be free to charge less than such notified fees. The
Implementation Agency will ensure that the highway facility is available
to all the users on equal terms and no user is charged more than the
notified fee or harassed in any manner, and that the private facility does
not result in the creation of private monopolies. The Implementation
Agency will also ensure that the highway stretch is maintained to the
proper standards. The Implementation Agency may carry out surprise and
periodic checks, and in case of any default by the enterprise, suitable
penalties on the defaulting enterprise may be imposed by the
Implementation Agency.
The enterprises will be obliged to protect the national interests
(like national security) whenever necessary and required. They will abide
by various statutory requirements relating to protection of environment,
safety etc.
Transfer of the Project to the Government: For the purposes of
transfer, the project will consist of the assets built within the right-of way
and the junction/inter-section areas and the enroute highway related
facilities. At the end of the concession period, the project, in sound
condition, shall be transferred by the enterprise to the Government free of
any cost. The standards to which the project must conform to, at the time
of its transfer to the Government, will be laid down in the concession
agreement. Even after the transfer of the project to the Government, the
Implementation Agency will continue to exercise control on the highway
related developments at the entry/exit points and the advertisements.
Key Issues Facing the Road Sector:
Although the Indian transportation infrastructure is one of the
largest in the world, it is far from being the best. The population of the

108

country is almost four times that of the U.S. and has one of the highest
growth rates in the world. The existing transportation system is not
adequate to sustain the current rates of economic and industrial
development in the country. Demand has constantly outstripped the supply
of transportation over the last fifty years. Compared to the U.S., the
amount of freight traffic carried by highways in India is quite meagre. This
is partially due to poor surface quality of the roads. The Indian automobile
industry today manufactures a large variety of multi-axle vehicles with
turbo-charged engines, but most of these are currently exported. The
Indian industry needs large freighters to transport goods. The automobile
industry has necessary facilities to manufacture these in sufficient
quantities. The inadequate road infrastructure hence acts as an economic
bottleneck impeding the growth of both of these industries.
Financing Highway Development
The road sector in India has relied entirely on budgetary resources,
which stagnated at about 3 per cent of the total plan expenditure. In
absolute terms, the funds allocated have proved grossly inadequate. Given
the emphasis on expansion of basic social services coupled with the
pressure on fiscal deficit, any major shift of budgetary resources in favor
of highways seems unlikely, and cannot in any case be justified in the
overall context of Governments commitment to commercialize
infrastructure services.
It is felt that the budgetary resources of the government should be
deployed mainly for leveraging private capital and market borrowings, and
for up gradation and strengthening of the two-lane and single-lane
highways.
For several years, it was believed that like elsewhere in the world,
highways in India could not be tolled unless a free alternative was
provided. This argument is certainly valid for local users who depend on a
highway as their only means of transportation. However, for commercial
traffic and cars plying between two cities, improved services for a small
fee can hardly be questioned if such a fee is earmarked for servicing the
investment on augmentation and upkeep of the respective highway. It is
only through the levy of toll (user) charges that the Government will be
able to develop the national highways on a sustainable basis, and attract
the requisite private investment for this purpose. The toll charges could be
real tolls, shadow tolls or in terms of annuity schemes, as given below:

109

Shadow tolls: While toll charges are paid by the users, shadow
tolls (as opposed to real tolls) are those paid by the Government and not
by the user. Shadow toll projects are predicted on recovery of user charges
for the use of the highway by each vehicle in accordance with a predetermined tolling structure.
Annuity Scheme: The annuity scheme, a modified version of
shadow tolls, has also been in debate during the recent past. Under this
arrangement, payments to the BOT concessionaire are determined in
absolute terms, irrespective of the number vehicles using the highway.
Shadow toll and annuity payments essentially entail budgetary
funding on a deferred basis. In the Indian context, the constraint of
budgetary allocations, present as well as future, makes both options
unviable as these can at best sustain only a fraction of the highway
development programmes.
It should be recognized that the shadow toll and annuity schemes
are predicated on private entities setting up the project companies and
raising resources from the market for funding their respective projects.
The debt as well as the equity deployed by such companies would be
significantly costlier as compared to the debt raised by the
Government/NHAI. The shadow toll/annuity scheme would, therefore,
imply a comparatively smaller programme as compared to an arrangement
where funds are raised and serviced by the Government/NHAI since the
size of either programme will have to be capped by the ability of the
Government/NHAI to contract deferred payments. It may be argued that
the higher cost of private capital will be offset by efficiency gains, but this
proposition would need to be closely scrutinized in the context of the
emerging framework and practices.
It is argued that the resources required for development of the
national highways can be raised by private entrepreneurs who will be
compensated by way of annuity payments, which in turn will be sustained
by a cess on fuels. Alongside, some of the highways are proposed to be
funded through user-paid tolls. It seems doubtful whether, legally as well
as from the economic stand point, the user of a road can be expected to
pay a toll while the fruits of a cess recovered from him are enjoyed by a
user in another State or region using the same class of road. It may rather
be appropriate to use the cess mainly for two-laning and strengthening of
highways across the country while all four-laning should be sustained by
tolls.

110

Here it is important to note that if the cess is used to maintain the

highways across the country, the issue of the cess collected in a State
being used for some highways in another State which are in bad shape
might lead to a conflict between the two States.
The more significant concern in relation to the shadow toll/annuity
is the identification of toll roads and toll-free roads; it is difficult to
visualize how the Government will be able to justify the toll roads in one
State or region and build toll-free roads in another. The States subjected to
toll roads may refuse to accept them if they find that no toll is being levied
in another State or region. The political fall-out of such discrimination
may also not be easy to deal with. In fact, even an experimental initiation
of shadow tolls/annuity scheme may deal a fatal blow to the very concept
of toll roads, which is still in its nascent stage in India.
The fallout of the shadow toll or annuity scheme would have its
adverse impact on development of the state highways. If the Government
of India were to abandon the commercialization of highways, it would be
difficult for the State Governments to pursue development of highways.
With the imposition of a cess on motor fuels by the Union Government,
the State may not find it possible to tax fuels any further for raising
resources to fund their highway programmes. A holistic view of the entire
sector is, therefore, essential for ensuring a balanced and coordinated
approach for restructuring the highways.
Reform and Restructuring of Highway Financing
The blue print for the national highway development should
envisage four-laning of national highways in the first phase to be followed
by six-laning, along with the setting up of service lanes, after a gap of 7-9
years. At the six-laning stage, access control may be introduced for
effecting better traffic management and confining slow moving traffic to
service lanes. At that stage, the national highways would be close to
expressway standards, catering to a much greater volume of traffic. Given
the resource constraints, phased development alone would be a sustainable
option.
A programme of such magnitude can succeed only if a holistic
approach is adopted towards reforms and the restructuring of the highways
sector. First and foremost, the NHAI Act would have to be amended for
empowering NHAI to grant BOT concessions to private entities. More
teeth may also need to be provided to NHAI and BOT concessionaires for

111

managing and maintaining highways and the appurtenant lands. There is

also need to modify the structure and operations of NHAI to make it more
conducive to play a major role in the development of highways through
BOT contracts.
Model Framework: Whatever is the nature and ownership of fourlaning projects, the framework governing their operations would have to
be uniform so as to provide an assured minimum level of service and
safety to the users across the country. Ensuring a level playing field for all
the investors would require that a common framework, whether owned by
the Government/NHAI or by private entities, governs all project
companies. An appropriate framework would also virtually eliminate the
scope for increasing the liabilities of NHAI as compared to the present
arrangement where the gap between the tender price of highway projects
and their out-turn price is very wide and unsustainable. Such a framework
would also save on time and transaction costs, besides imparting
transparency and fairness.
In this context, it is important to note that a Model Concession
Agreement has been prepared which deals with all the critical issues
relevant to limited recourse financing of infrastructure projects, and tries
to address equitably the concerns of all principal stakeholders, viz. the
investor, lenders, Government and NHAI, with an emphatic orientation in
favor of the user. It is expected that adoption of this framework would
accelerate the pace of highway development by motivating both the NHAI
as well as the prospective entrepreneurs to improve the performance and
achieve the targets of growth and development of highways in India.
Public Private Partnership (PPP): The requirement of galloping
resources and the concern for managerial efficiency and consumer
awareness in recent times has led to an active involvement by the private
sector. With a view to doing so, the Department of Road Transport and
Highways has laid down comprehensive policy guidelines for private
sector participation in the Highway sector. The Government has also
announced several incentives such as tax exemptions and duty free import
of road building equipment and machinery to encourage private sector
participation in the Highway sector. It has been decided that all the subprojects in NHDP Phase-III to Phase VII would be taken up on the basis of
Public Private Partnership (PPP) on a Build, Operate and Transfer (BOT)
mode or Annuity mode. The private sector participation envisaged in
Phase II of NHDP has also been increased.

112

Revised strategy for implementation of the NHDP: A Committee

on NHDP was constituted by the Prime Minister on 8th August, 2009,
under the chairmanship of B.K. Chaturvedi with the proviso that the
financing plan for 2010-11 onward would be considered by the
Empowered Group of Ministers for further action, including such changes
to the work plan as may become necessary.
Frame work for Commercialization of Highways: In the context of
the NHDP, the framework for commercialization of highways as proposed
by Mr. Gajendra Haldia has been studied to evolve a comprehensive
policy for improving the private sector participation in the road sector. The
Model Agreement, as proposed by him, takes into account the deficiencies
in the present framework of private participation.
The model attempts to address the concerns of all the stakeholders
like the investor, lenders, the Government and NHAI, with an emphatic
orientation in favor of the user. The model proposes a phased development
of the Project Highway to avoid huge capital commitment and thus
encourage private participation. The agreement also provides for strict
definition of technical parameters from the users point of view. Issues
such as risk allocation, concession period and concession fee are clearly
analyzed with special focus on encouraging private participation. It also
provides for substantial flexibility to the Concessionaire in terms of
operation, construction, monitoring and supervision. The obligations of the
Concessionaire and the NHAI are clearly spelt out. Thus, the Model
Agreement Framework has been well drafted and can be used as a
foundation for developing policy initiatives for improving private
participation in the roads sector.
User Fee
The agreement provides for indexation of user fees to the extent of
30% linked to WPI and exchange rate variations (20% indexed to WPI and
10% to exchange rate variations). A higher level of indexation is not being
favored due to the following reasons:

It would require users to pay more for a declining (more

congested) level of service when they should be receiving the
benefit of a depreciated fee;

A higher indexation would also add to uncertainties in the

financial projections;

113


At the time of six-laning however, a one time increase in
toll rates has been proposed for neutralizing inflation occurring
between project commencement and the six- laning;

Since the user fee has also been linked to the exchange rate
variations, it allows the bidders to individually determine the
extent of foreign equity and external loans that such a linkage
would sustain;

In order to improve the financial viability of the toll roads,

a predetermined increase in user fee has been provided during the
first 5 years. This is done to improve the revenue streams; and

The user fee in the first year has not been kept at a very
high level to avoid the risk of user resistance.
Finance Mechanism
Apart from financing projects from budgetary allocation, the NHAI
proposes to finance its projects by a host of financing mechanisms. Some
of them are as follows:Cess: In a historic decision, the Government of India introduced a
Cess on both petrol and diesel. This amount at that time (at 1999 prices)
came to a total of approximately Rs. 2,000 crores per annum. Further,
Parliament decreed that the fund so collected was to be put aside in a
Central Road Fund (CRF) for exclusive utilization for the development of
a modern road network. The developmental work that it could be tapped to
fund and the agencies to whom it was available were clearly defined as the
construction and maintenance of State Highways by State Governments;
development of rural roads by State Governments; construction of rail
over- bridges by Indian Railways; and construction and maintenance of
national highways by NHDP and Ministry of Road Transport &
Highways. Presently, the cess contributes between Rs 5 and 6 thousands
crores per annum towards NHDP.
Loan assistance from international funding agencies: Loan
assistance is available from multilateral development agencies like Asian
Development Bank and World Bank or other overseas lending agencies
like Japanese Bank of International Co-Operation.
Market borrowing: NHAI proposes to tap the market through
securities cess receipts.

114

Private sector participation: Major policy initiatives have been

taken by the Government to attract foreign as well as domestic private
investment. To promote involvement of the private sector in construction
and maintenance of National Highways, some Projects are offered on
Build, Operate and Transfer (BOT) basis to private agencies. After the
concession period, which can range up to 30 years, this road is to be
transferred back to NHAI by the Concessionaries.
NHAI funds are also leveraged by the setting up of Special
Purpose Vehicles (SPVs): The SPVs will be borrowing funds and
repaying these through toll revenues in the future. This model will also be
tried in some other projects. Some more models may emerge in the near
future for better leveraging of the funds available with NHAI such as
Annuity, which is a variant of the BOT model
Toll Rates
The levy of user's fee is governed by National Highways Fee
(Determination of Rates and Collection) Rules, 20082, the National
Highways (collection of fees by any person for the use of section of
National Highways/Permanent Bridge/Temporary Bridge on National
Highways) Rules, 1997, and the National Highways (Fees for the use of
National Highways section and permanent Bridge-Public Funded Project)
Rules, 1997.
Base rate of fee:
(1) the rate of fee for use of the section of national highway,
permanent bridge, bypass or tunnel constructed through a public funded
project or private investment project shall be identical.
(2) the rate of fee for use of a section of national highway of four
or more lanes shall, for the base year 2007-08, be the product of the length
of such a section multiplied by the following rates, namely:Type of vehicle
Car, Jeep, Van or Light Motor Vehicle
Light Commercial Vehicle, Light Goods Vehicle or
Mini Bus
Bus or Truck

Base rate of fee per

km (in Rupees)
0.65
1.05
2.20

The notice dated the 7th May, 2010, and 25th May 2010 with file No. F. No. RT16031/3/2009-T.

115

Heavy Construction Machinery (HCM) or Earth

Moving Equipment (EME) or Multi Axle Vehicle (MAV) (three
to six axles)
Oversized Vehicles (seven or more axles)

3.45

4.20

(3) the rate of fee for use of a section of national highway, having
two lanes and on which the average investment for upgradation has
exceeded Rupees one crore per kilometer, shall be sixty percent of the rate
of fee specified under sub-rule (2) of rule 4
(4) the rate of fee for use of permanent bridge, bypass or tunnel
constructed with the cost exceeding Rupees ten crore, shall for the base
year 2007-08 be as follows
Base rate of fee (Rupees per vehicle per trip)
Cost
of
permanent
bridge, bypass or tunnel
(Rupees 1 crore)

Car,
Jeep,
Van or
Light
Motor
Vehicle

Light
Commercial
Vehicle,
Light
Goods
Vehicle or
Mini Bus

Bus
or
Truck

10 to 15
For every additional
Rupees five crore or part
thereof,
exceeding
Rupees fifteen crore and
upto Rupees one hundred
crore
For every additional
Rupees five crore or part
thereof,
exceeding
Rupees one hundred
crore and up to Rupees
two hundred crore
For every additional
Rupees five crore or part
thereof,
exceeding
Rupees two hundred
crore

5
1

7.50
1.50

0.75

0.50

Oversized
Vehicles
(seven or
more
axles)

15
3

Heavy
Construction
Machinery
(HCM) or
Earth
Moving
Equipment
(EME)
or
Multi Axle
Vehicle
(MAV)
(three to six
axles)
22
4.50

30
6

1.15

2.25

3.40

4.50

0.75

1.50

2.25

Provided that while computing the fee for the section of national
highway on which a permanent bridge, bypass or tunnel costing Rupees

116

fifty crore or more is situated, the length of such a permanent bridge,

bypass or tunnel shall be excluded from the length of such section of
national highway and fee shall be levied at the rates specified for such
permanent bridge, bypass and tunnel.
Provided further that where the cost of such a permanent bridge,
bypass or tunnel, as the case may be, is less than rupees fifty crore, and the
paid permanent bridge, bypass or tunnel forms a part of the section of the
national highway, then instead of above rate of fee, the rate of fee
specified under sub-rule (2) of rule 4 shall be applicable for such a
permanent bridge, bypass or tunnel.
(5) Annual Revision of Rate of Fee:
(i)

The rates specified under rule 4 shall be increased, without

compounding, by three per cent each year with effect from
the 1st day of April, 2008, and this increased rate shall be
deemed to be the base rate for the subsequent years.

(ii)

The applicable base rates shall be revised annually with

effect from April 1 each year to reflect the increase in
wholesale price index between the week ending on January
6, 2007, and the week ending on or immediately after
January 1 of the year in which such a revision is undertaken
but such a revision shall be restricted to forty per cent of
the increase in wholesale price index.

(iii)

The formula for determining the applicable rate of fee shall

be as follows:Applicable rate of fee = base rate + base rate
0.4

Illustration: If the revision is to be made for the year 200809 by applying the wholesale price index of the week
ending on 5th January 2008, then the rate for car jeep or van
will be 0.6796 as computed below:
Applicable rate of fee: 0.6695 + .6695

0.4 =

0.6796.
(iv)

Annual revision of rate of fee under this rule shall be

effective from first of April every year.

117

(6) Discounts:
i. The executing authority or the Concessionaire, as
the case may be, shall upon request provide a pass
for multiple journeys to cross a toll plaza within the
specified period at the rate specified in sub-rule (2)
of rule 9.
ii. A driver, owner or person in charge of a mechanical
vehicle who makes use of a section of national
highway, permanent bridge, bypass or tunnel, may
opt for such a pass and he or she shall have to pay
the fee in accordance with the following rates,
namely:Amount payable
One and half times of the
fee for one way journey
Two-third of amount of the
fee payable for fifty single
journeys

(iii)

Maximum number of one

way journeys allowed
Two
Fifty

Period of validity
Twenty four hours from the
time of payment
One month from date of
payment

A person who owns a mechanical vehicle registered for

non-commercial purposes and uses it as such for
commuting on a section of national highway,
permanent bridge, bypass or tunnel may obtain a pass,
on payment of fee at the base rate for the year 2007-08
of Rupees one hundred and fifty per calendar month
and revised annually in accordance with rule 5,
authorizing him to cross the toll plaza specified in such
pass;

Provided that such a pass shall be issued only if the driver, owner
or person in charge of such a mechanical vehicle resides within a distance
of twenty kilometers from the toll plaza specified by such a person and the
use of such section of national highway, permanent bridge, bypass or
tunnel, as the case may be, does not extend beyond the toll plaza next to
the specified toll plaza.
Provided further that no such pass shall be issued if a service road
or alternative road is available for use by such a driver, owner or person in
charge of a mechanical vehicle.

118

Exemption from Payment of Fee: No fee is levied and collected

from a mechanical vehicle transporting and accompanying some important
dignitaries3 and when used for official purposes by the Ministry of
Defence including those which are eligible for exemption in accordance
with the provisions of the Indian Toll (Army and Air Force) Act, 1901,
and rules made there under, as extended to the Navy also; the Central and
State armed forces in uniform including para military forces and police; an
executive Magistrate; a fire-fighting department or organization; the
National Highway Authority or any other organization or person using
such a vehicle for inspection, survey, construction or operation and
maintenance thereof; and used as ambulance.
Management of Toll Collection
The collection of toll in India is following the Metro Road Systems
(MRS) which stands out for its versatile design and thorough project
management. MRS systems provide better traffic management and reduce
operations costs. By using state of the art technology and modular designs
that can easily be adapted for a particular project's need, MRS is able to
provide cost-effective cutting-edge electronic toll systems.
Metro's electronic toll collection system is designed to assist in the
management of toll operations through technology that aids in
streamlining traffic movement and through collecting data that can be used
to make operational changes. Metro's systems gather and analyze data on
traffic volumes, vehicle classifications, vehicle speeds, and the fares
expected and collected. Metro's database and report capabilities allow for
better management of tolling operations, ensuring maximum revenue.
Metro is able to provide three different levels of toll collection
systems, chosen carefully to meet the client's financial and operating
needs.
Fully Automatic - Electronic Toll Collection Systems: On its fully
automatic toll collections systems, Metro works together with world leader
Kapsch TrafficCOM AG which has pioneered automatic toll collections
3

These include the President of India; the Vice-president of India; the Prime-Minister of
India; the Chief Justice of India; the Governor; the Lieutenant Governor; the Union
Minister; the Chief Minister; the Judge of Supreme Court; the Chairman of the Council of
State; the Speaker of the House of People; the Chairman of the Legislative Council of the
State; the Speaker of the Legislative Assembly of the State; the Chief Justice of High
Court; the judge of High Court; Ministers of States; and Foreign dignitaries on State visit.

119

systems worldwide for the last decade. This partnership ensures that the
best intelligent toll technology and experience is available for use on the
project. For the electronic toll collection systems Metro offer the CEN 278
Microwave Technology through M/s Kapsch TrafficCOM AG. These
electronic toll collection systems are a combination of completely
automated toll collection systems (requiring no manual operation of toll
barriers or collection of tolls) and semi-automatic lanes. Various traffic
and payment data are collected and stored by the system as vehicles pass
through. The different technologies involved are logically integrated with
each other but remain flexible for upgrades. They also include
sophisticated video/image capturing equipment for full-time violation
enforcement.
Some of the security components included are real-time toll plaza
surveillance system; automatic vehicle identification system (based on inroad sensors); license plate recognition; zoom capability on captured
images; and laser based toll audit system. The system effectively correlate
captured video images with toll transaction data to provide a state-of-theart, accurate, and cost-effective violation enforcement system. Lanes at the
toll plaza can be configured for optimal traffic management, including
some which are restricted to pure electronic tolling and others which use
manual fare collection.
Semi Automatic Toll Collection Systems: Metros Semi-Automatic
Toll Collection system has many of the features of the fully automatic
system, but also relies on human operators to collect the tolls. Software
collects and records data, generates traffic reports, and audits the
collection of money and class of vehicles. The toll barrier opens and closes
automatically in synchronization with the receipt of payment and exit of
vehicle. The system creates an audit of the vehicle class identified by the
operator and by the system, and makes a recording of the violating
incidents.
Basic Toll Collection Systems: The basic toll management system
uses software to provide real-time control, monitoring, and management of
the toll revenues. System devices such as toll gates, and traffic lights, if
any, are still operated manually. To check revenue leakage from toll
collection, the government is planning to make the same agency
responsible for toll collection and maintenance. The agency will be
awarded work through competitive bidding on the basis of operatemaintain-transfer (OMT). At present, operation and maintenance of

120

independent toll audit systems and actual collection are done by two
different agencies. In 90% of the cases, toll collection is being sponsored
by the Directorate General of Resettlement (DGR). DGR is an interservice organization functioning directly under the Ministry of Defence.
For the remaining 10%, the agency is selected through an auction system.
The toll collection agency deposits the collections on behalf of the
National Highways Authority of India (NHAI). In return, NHAI pays them
a monthly sum for their services. The operations and maintenance agency,
in the present system, is selected through a standard bidding system.
Under the new system, a single agency will be responsible for both works,
and will be selected through competitive bidding on the basis of the
highest upfront payment the agency is willing to make to NHAI. The latter
has selected OMT as the financing model. This will check leakage in toll
collection since the agency will have to recover its costs. The Government
is in the process of finalising the bidding document. There are nearly 60
toll plazas across the country at the moment and the figure is likely to go
up with the Government giving highest priority to build-operate-transfer
(BOT) toll projects. A new tolling technology committee headed by Mr
Nandan Nilekani is expected to work out a single, smooth toll collection
system across the country's highways.
To conclude, the NHAI is constructing highways and expressways
on the principle of BOT (build- operate- transfer) for which toll fee is
levied from the users. This will help India to develop its network of
highways through public-private-participation (PPP) mode. However, the
studies4 indicate that the existing toll rates are already high; these need not
be revised upward every year; the revision should not be related to whole
sale price index for the whole amount as the capital cost is incurred earlier.
Only working cost should be related to the wpi; the period of collection of
toll (which is 15 to 20 years) is very high; and the investment in the
highway is recovered in approximately 3 to 4 years.
In view of the above, it is important that the assumptions and the
criteria that form the basis of determining the rates and the time period at
Toll Plaza need intense scrutiny for all the 20 odd projects under BOT
category all over the country.

Lall, B.R. (2009), National Highways Toll Plazas: A Source of Open Loot, available:
http://voi.org/index2.php?option=com_content&task=view&id=106&pop=1&page=0&It
emid=93

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6
Eco-taxes for Vehicles
The issue of vehicular pollution is of critical importance in
metropolitan cities. Any discussion on fiscal instruments which have an
impact on the road transport sector cannot afford to ignore the possible
repercussions on environment. This is so as there already exists
widespread public apprehension that further growth in road transport will
aggravate the already existing environmental problems.
In India, the pollution content in the air is very high. It is of a
relatively high order in the metropolitan cities of Delhi, Mumbai, Kolkata
and Chennai. The results of the ambient air quality monitored in Delhi
suggest a relatively high frequency of Suspended Particulate Matter
(SPM), Sulphur Dioxide (SO2), Nitrogen Dioxide (NO2) and minute
particles of heavy metals in the air. The status of the quality of air in the
other cities is also not very satisfactory.
In most of the Indian cities, the annual average concentration of
Respirable Suspended Particulate Matter (RSPM) and Suspended
Particulate Matter (SPM) exceeds the ceiling prescribed by the national
ambient air quality standards (Exhibit 6.1).
There is considerable inter-state variation in Carbon Dioxide (CO2)
emissions (Table 6.1). State level CO2 emissions figures for 2000 indicate
that Uttar Pradesh has the highest level of pollution followed by Madhya
Pradesh, Maharashtra, Andhra Pradesh, West Bengal, Gujarat, and Tamil
Nadu. Per capita CO2 emission figures show that Madhya Pradesh has the
highest emission at 660 metric tonnes followed by the 440 metric tonnes
in Delhi, Orissa and Goa. Punjab has a per capita CO2 emission of 450
metric tonnes. High per capita emissions may be due either to the State
undertaking production of polluting material as is the case in the States of
Madhya Pradesh, Chhattisgarh, and Bihar or it may be due to high per

122

capita consumption as in Delhi, Goa, Gujarat and Maharashtra. States like

Jharkhand, Orissa, Chhatisgarh and Andhra Pradesh have India's major
steel plants that consume a lot of coal. This makes their emission levels
disproportionately high compared to their income. Looking at the all India
figures, nearly 77 percent of the CO2 emissions are from coal. About 70
percent of the coal in India is consumed in the power sector.
Exhibit 6.1: Deviation in the National Ambient Air Quality Standards

Source: Madras School of Economics (2010), Eco-Taxes in a GST Regime, Discussion Paper, March 2010,
Chennai.

Table 6.1: State level CO2 Emissions: 2000

('000 metric tons of carbon)

State
Jammu & Kashmir
Himachal Pradesh
Punjab
Haryana
Uttar Pradesh
Rajasthan
Delhi
Bihar
Orissa
West Bengal
Assam
Gujarat
Maharashtra
Goa
Madhya Pradesh
Andhra Pradesh
Karnataka
Kerala
Tamil Nadu
Others

Aggregate
696.5
659.1
10845.7
5460.5
44268.3
8929.3
6033.8
9012
16172.3
23363.7
1097
18461.5
35595.4
652.2
39279.4
30126
9059.6
3034.2
17584.9
43712.6

Per Capita
0.07
0.11
0.45
0.26
0.27
0.16
0.44
0.11
0.44
0.29
0.04
0.37
0.37
0.44
0.66
0.4
0.17
0.1
0.28
0.62

Source: Ghoshal, Tapas and Ranajoy Bhattacharya (2007), State Level Carbon Dioxide Emissions of India: 1980-2000,
http://ssrn/abstract=999353.

123

The ambient air quality is affected by many factors such as the

industrial structure of the place/region, household activities and transport
system. However, the available data1 for some of the metro cities suggests
that automobiles are one of the major contributors to the overall pollution
level in the city (Table 6.2). In fact, the trends in growth and composition of
the type of vehicles affect the motor vehicle emission which ultimately
affects the ambient air quality of the town.
In terms of relative share of total number of vehicles amongst the
major States, Maharashtra had the highest share (12.1%), followed by
Tamil Nadu (11.9%). Gujarat was the next with a share of 9.7%, followed
by Uttar Pradesh with a share of 8.8%. In terms of two wheelers, Tamil
Nadu had the highest share (13.2%) followed by Maharashtra (11.8%). In
terms of cars, Maharashtra had the largest share but in terms of goods
vehicles, Tamil Nadu has a higher share.
Since quantitative information on the pollution source inventory is
not available, it is difficult to assess the exact impact of motor vehicles
vis-a-vis other sources to the pollution load in Indian cities. A few
independent studies indicate the contribution of motor vehicles to the total
pollution load in Delhi and Bombay2 (Table 6.2).
Table 6.2: Contribution from Vehicle Exhaust to the Total Pollution Load
(per cent)

Pollutants

Sectors
Industry

Transport

Domestic & Others

Delhi
CO
NOX
SO2
PM

76-90
66-74
5-12
3-22

CO
NOX
SO2
PM

92
60
2-4
0-16

37-13
13-29
84-95
74-16

10-16.3
1-2
0-4
2-4

8
40
82-98
34-96

0
0
0-16
53-56

Mumbai

Note: This summary is based on air quality studies undertaken by different agencies from 1988 to
1995 as given in Table 4.6 of Government of India (2002), Report of the Expert Committee on Auto
Fuel Policy, pp. 44-45

Government of India (2006), Report of the Working Group on Automotive Industry,

Eleventh Five Year Plan (2007-2012), Ministry of Heavy Industries & Public Enterprises,
New Delhi.
2
Chelliah, R. J., Paul. P. Appasamy, U. Shankar, and Rita Pandey (2007), Ecotaxes on
Polluting Inputs and Outputs, Academic Foundation, New Delhi.

124

In other cities too, motor vehicles contribute significantly to the

total pollution load. It is, therefore, important to control motor vehicle
emission by using fiscal instruments. This difficult task is possible only if
we can measure and monitor emissions which occur at the consumption
stage and which are generated by a number of small diffused / non-point
sources. In fact, it is not only technically complex to measure vehicular
emission but it is also a costly exercise. Therefore, it is easy to use tax
measures related to inputs or products that indirectly affect emission. For
example, the tax could be related to the engine specifications and/or
quality of fuel which could significantly control auto emissions.
A recent report of the Expert Committee on Auto Fuel Policy has
opined that the market based instruments designed to change the
behaviour of the vehicle owner have either not been employed or have
been employed to a limited extent for pollution control and its abatement.
It has suggested that the Auto Fuel Policy should be so designed that it
introduces economic instruments that set in motion processes that would
lead to improvement in the air quality3.
Public versus Private Transport
More pollution is generated by the users choice in favour of
private transport in comparison to public transport. People opt for private
vehicles instead of public transport as the total cost of travel (i.e. fuel,
wear and tear, time and effort etc.) is more in the latter mode of transport
than in the former or as the difference between the two modes is
negligible. It may be noted that as rational human beings, consumers take
into account the implicit cost of travel in both modes of transportation
while making a choice. The cost of public transport goes up if public
transport does not have a point to point network and does not adhere to a
time schedule or is excessively overcrowded.
Public transport usually charge a variable price based on the
distance travelled. The real cost of commuting by these means on the part
of commuters is the purchase cost of ticket and the cost of time lost and
hassles encountered in purchasing it. The cost involved in the ownership
of a private vehicle, on the other hand, is purchase cost, fuel cost as per
travel length, parking charges, and wear and tear. An analysis of the
individual components comprising maintenance cost shows that parking
3

Government of India (2003), Auto Fuel Policy, Ministry of Petroleum and Natural Gas,
New Delhi.

125

cost in India has never been a deterring factor. In the absence of overnight
parking charges on city roads, owning a garage is not a precondition for
owning a vehicle. For a vehicle in good condition, the expenses related to
repair works is negligible. The payment of taxes for owning a vehicle is
one-time. Thus, if one could afford to buy a vehicle, the cost of
maintaining it is more or less confined to its fuel cost. Going by such
calculations, the expenses incurred in travelling a stipulated distance by
city bus and by two-wheeler are almost the same. The cost of travel is
slashed to one-half if a pillion rider is also included. For example, in
Delhi, travelling about five kilometers by DTC buses (considering ticket
cost only) and by two-wheeler (for single commuter) costs about five
rupees. Allowing a pillion rider in two-wheeler makes it cheaper by about
20 paise per km4. If one includes implicit cost of time and trouble,
associated cost is much higher. This forms the basis of a general psyche
that using a two-wheeler is economical and convenient as compared to
public transport.
Under these circumstances, the commuter prefers to use his own
vehicle as compared to public transport. In doing so, a vehicle generates
pollution causing health hazards to others. The owner does not bear any
cost towards pollution abatement portraying a conspicous 'free-rider' case.
In addition, the owner derives benefit from the lower cost of commuting
compared to public transport.
The solution to such a problem involves three options: First option
is to rely upon moral persuasion, that is, appealing to people to lessen the
use of private transport and share vehicles with others wherever possible.
The second option is the imposition of legal coercive controls on users of
vehicles. The third option is to devise methods to bring about changes in
the price structure so that commuting cost in ones own vehicle is higher
than that in public transport. Of these three, the effectiveness of moral
persuasion is questionable as it leaves decision-making to the foresight
and awareness of people, particularly when economic rationality works to
the contrary. Reliance on command and control measures such as strict
vigilance on pollution emission and tightening emission norms will not
ameliorate the situation in the event of the growing number of vehicles.
While pollutants dumped into the atmosphere grow proportionately with

See Bariv, Kaustuva, Vehicular Pollution in India: Let Polluters Pay,

http://www.ignou.ac.in/openchannel/feb/ page11.htm.

126

the number of vehicles, tightening of standards may not be technically

feasible after a certain level. This leaves scope for the third option.
With a view to implementing the above, it is suggested that a
presumptive tax is imposed on vehicles. The design of the tax should be
such that it fulfils the objectives of correcting the distorted price structure;
acts as a deterrent to the rapid growth in the number of vehicles; and also
generates substantial revenue. To illustrate this fact, let us make a
conservative estimate that a private vehicle commutes about 6000 km. per
annum. The cost advantage to be neutralized is Rs. 0.25 per km. through a
tax. That is, the tax should be Rs. 1500 per annum per vehicle. In a city
like Delhi, with 30 lakh vehicles, such a measure can generate revenue
worth Rs. 450 crore. Simulation shows that a Rs. 0.30 per km increase in
commuting cost will justify a tax amount of Rs. 1800 per annum per
vehicle and will generate revenue of Rs. 540 crore. The level of
presumption tax can be city-specific keeping in view the cost advantage
and desired growth in number of vehicles. While the proposed tax can be
levied on all vehicles, exemption may be provided to public transport
vehicles. This is because the tax is not levied on the basis of ability to pay
or carbon content of the emission. The ultimate objective of the tax is to
correct the distorted price structure where two-wheelers enjoy fuel
economy thereby operating at a lower cost.
General Taxes on Motor Vehicles in OECD Countries
Most OECD countries levy three type of taxes on motor vehicles.
These are value-added tax, sales tax (or registration tax) and annual
circulation tax. Value Added Tax (VAT) is levied in all OECD countries
except US where a sales tax is levied. Tax rates vary from 5% (in Japan)
to 25% (Sweden and Denmark). In principle, VAT affects only purchase
for private consumption. If a motor vehicle is purchased for business
purpose, the tax is refunded. A number of countries levy a one-time sales
tax or a registration tax in addition to a general VAT. Countries apply
various methods to calculate the tax. The calculation of the tax normally
depends on the weight or the size or fuel consumption of the vehicle. It
could also be a percentage of retail prices. The level of sales tax differs
widely amongst the countries. In Finland and Denmark, the sales tax
amounts to 100%, and 200%, respectively. Generally, the sales tax is high
on vehicles for private use (e.g. passenger cars), while vehicles for
commercial use (e.g. heavy goods vehicles) face a lower tax, except in US
where heavy goods vehicles are taxed at a higher rate than passenger cars.

127

In addition, all the countries levy some form of circulation tax.

These are charged on a periodic basis, and usually confer the right to use
the public road network. These taxes are charged according to various
criteria such as engine capacity, horsepower, fuel type, region of
registration etc. In some countries, the tax is a fixed amount per vehicle,
while other countries relate the rate to the weight of the vehicle. Heavy
goods vehicles are commonly taxed higher than passenger cars. A number
of countries apply a system where diesel powered passenger cars face a
higher circulation tax than petrol-powered cars to compensate for the
lower diesel tax.
Eco-Taxes in OECD Countries
In addition to the above taxes, almost all OECD countries levy
some form of tax (direct or indirect) on the production, sale and use of
motor vehicles. These taxes have been restructured to incorporate
environmental concerns.
One-off vehicles sales or registration taxes are most often
differentiated by the weight or engine size of cars and lorries. The tax
bases used in annual taxes for vehicle usage include weight, engine size,
the number of axles etc. Taxes on production have been differentiated
based on the type of vehicle and fuel used (Norway, Netherlands,
Sweden); age (Germany); fuel economy (Canada, Denmark, USA); engine
power (Austria, Belgium); cylinder capacity (Ireland, Iceland) and
whether or not the vehicle is fitted with a catalytic converter (Finland,
Greece).
The eco-taxes levied in EU countries varies from country to
country (as given in Table 6.3). Vehicle excise duty is levied according to
type, weight and fuel used in Netherlands and according to type, weight,
number of axles and fuel used in Norway and Sweden. The annual tax on
motor vehicles not meeting the ED emission standards is differentiated by
age of the car in Germany; and in Canada, a tax is levied on the purchase
of fuel inefficient passenger and sport utility vehicles and a subsidy of
$100 is provided to cars with a highway fuel efficiency rating of less than
6 litres per 100 km. In Denmark, annual passenger car fuel consumption
tax is levied according to the fuel efficiency of the vehicle.
Thus, there is considerable global evidence on the use and
application of economic instruments in addressing the issues of emission
and fuel consumption of vehicles. In view of the wide use of taxes and

128

subsidies in providing incentives to fuel efficient vehicles there is a strong

case to consider the feasibility of introducing incentives for improving the
fuel economy in the Indian context. The incentive structure can be linked
to (a) the cost of upgrading the engine technology and (b) the benefits
derived from such up-gradation which is the health damage cost forgone
due to less fuel burnt per km. and resultant lower emissions. The incentive
structure can also be a weighted average of both the above factors.
Instituting Eco-Taxes5
The above analysis indicates that the taxes on a vehicle is levied at
the time of its purchase, or at the time of its registration and while using
the same. All these taxes can be used to pursue different policy goals.
While taxes on purchase and ownership could motivate manufacturers to
develop low carbon engine vehicles and people to buy them, taxes on the
use of vehicle could affect the use of a particular type of fuel. Therefore,
the eco-taxes must be used to reduce carbon emissions as well as for
managing the overall demand of the transport sector.
Some studies6 point out that the emission of carbon could be
reduced by following the strategies of (i) supporting a shift to new
technologies and fuels; (ii) promoting lower carbon transport choices, and
(iii) using market-based measures to encourage a shift to lower carbon
transport. The studies also point out that tax concessions and subsidies
could be used for promoting the production as well as the consumption of
electric/cleaner vehicles. This could be attempted by re-circulating
revenues from other taxation sources.
Transport taxes may be levied at various points of the transport
system depending upon whether the purpose is to manage vehicle choice
or travel behaviour. Focus on both of these purposes can contribute to a
wider policy objective such as the reduction of carbon emissions from
transport.
As stated in Chapter 4, taxes on motor vehicles are levied at three
specific points, viz.
at the time of purchase

This section is based on Government of UK (2010), Reducing Carbon Emission

Through Transport Taxation, Briefing Paper Six, GreenFiscal Commission, London.
6
Department for Transport (2009) Low Carbon Transport: A Greener Future. A Carbon
Strategy for Transport, Department of Transport, London.

129

on ownership of the vehicle, i.e. when the vehicle is

registered in the State (annual registration fee) and
on the use of vehicles (such as taxes on fuel, tolls, permit
fee, passengers and goods tax etc.)
Taxes related to purchase of vehicle such as cenVAT, state VAT,
CST etc. have a strong influence on the choice of vehicle and depending
on the tax-design, also on the choice of technology associated with the fuel
it uses.
Circulation taxes, although distanced from purchase, also largely
have an impact upon vehicle choice rather than use.
Taxes on various aspects of the use of vehicles (fuel, road user
charges and parking) have the strongest impact upon decisions to use a
vehicle once it is purchased. The latter are, therefore, the main taxes
related to managing transport demand. Transport demand depends on a
number of factors which together determine the total volume of travel7.
These include total number of trips, trip length, mode of transport used
and vehicle occupancy. Policies for reducing congestion as well as those
considering the total volume of travel also require focus on the location
and time of trips. During the last decade, the UK and many other
developed nations have reformed existing forms of road transport taxation
to address a number of transport policy goals. This has involved
modifying the design of purchase, circulation and fuel taxation to promote:
More fuel efficient vehicles
Alternative fuel vehicles
Cleaner fuels (lower carbon and/ or other emissions)
Modal shift and traffic volume
Congestion reduction.
Overall, when looking at the role of taxation in transport policy it
should be recognised that some important tax measures are primarily to
influence vehicle technology, the type of fuel used and vehicle fuel
economy. If the aim is to manage transport demand, then a comprehensive
approach which covers all its component aspects needs to be adopted.
7

Potter, S (2007), Sustainability, energy conservation and personal transport. Chapter 1

(pp 9-35) of Warren, J, (Ed) Managing Transport Energy, Oxford University Press,
Oxford.

130

Purchase Taxation Measures

Many countries, and most European Union States, have a specific
car purchase tax in addition to VAT, although the UK and Germany are
notable exceptions. The UK did have a 10 per cent Car Purchase Tax, but
in 1992 it was replaced by the UK Government policy of raising fuel duty.
In a number of EU countries, existing car purchase taxes have been
reformed to promote cleaner and low-carbon vehicle technologies. For
example, the Netherlands has introduced a series of reforms to its original
42 per cent car purchase tax that has led, from mid 2006, to registration
taxes being reduced for the most fuel efficient A- or B- rated cars8. An ex
post evaluation of the trial that preceded the full introduction of this
measure9 found that, compared to 2001, the market share of the Alabelled cars in 2002 increased from 0.3 to 3.2 per cent, while that of Blabelled cars rose from 9.5 to 16.1 per cent. This was a much greater
increase than had been anticipated10. VAT is also a purchase tax, and a
variable rate of VAT could be levied. Italy does this. Italians pay two rates
of VAT on car purchases; a standard 19 per cent on cars with an engine
capacity of less than 2,000cc (2,500cc for diesels), and 38 per cent for
those above this threshold.
Circulation Tax Measures
Most developed countries have an annual registration (or
circulation) tax entitling owners to use the public highway. In many
countries, this circulation tax varies according to the engine size or power
of a car. However, some nations have implemented reforms to address fuel
efficiency or environmental policy objectives. The UK has had a CO2
emission based circulation tax (Vehicle Excise Duty) for cars since 2001.
Initially the range of charges was small, but this has gradually been
widened. In May 2009, VED in the UK was restructured into 13 narrower
CO2 bands (see Table 6.4). The separate Alternative Fuel category will
be phased out by 2011 to make the whole system based on CO2 emissions.
From 2010, there will be a different rate of VED in the first year for
brand-new cars. This rate will be much higher for vehicles in Bands H-M
and zero for those in Bands A-D. Company car taxation is a sector specific
8

Skinner, I. Fergusson, et.al., (2006), Car Taxation and CO2 in Europe, Report for the
Energy Saving Trust, Institute for European Environmental Policy, London
9
VROM (2003), Evaluatie studie Energiepremie. Notitie van de staatssecretaris van
VROM aan de Tweede Kamer.
10
EEA (2005) Market-based instruments for environmental policy in Europe, European
Environment Agency (EEA), Technical Report No 8/2005

131

circulation tax. In the UK, around half of the cars are purchased by
commercial organizations for their employees, for both business and
private use. A major reform in UK company car taxation took effect from
2002, when the tax charge was related to a cars CO2 emissions, on a
sliding scale, up to a maximum charge of 35 per cent of a cars purchase
price. Moreover, in 2002, discounts for high business mileage were
abolished together with the most age-related discounts. These had
provided an incentive to drive further and to use older, more polluting
cars.
An assessment of the impact of this tax change11 showed that in the
first year of the new system, the average CO2 emissions of new company
cars decreased from 196 g/km in 1999 to 182 g/km in 2002. Because of
the abolition of the high mileage tax discount, the number of business
miles has decreased by over 300 million miles per year. It is notable that
this tax measure affected both vehicle choice and vehicle use. The size of
the tax is important. This is illustrated by the evidence from UK on the
strong impact of the relatively large reforms in company car taxation as
compared to the initial discernable effect of the (much smaller) VED
reforms. The 2007-09 changes to VED bands in the UK (particularly the
introduction of the higher CO2 bands, see Table 6.3) and the rise in rates
now appears to be having an effect on vehicle choice. In combination with
the 2009 scrappage subsidy scheme, fiscal measures in the UK have begun
to shift purchase patterns towards lower CO2 vehicles. The average CO2
emissions for the cars scrapped under the 2009 scheme is around 179g/km
as compared to 134g/km for new cars bought to replace them12.
Thus, experience indicates that complementary purchase and
circulation tax measures can have a significant policy impact on the type
of cars purchased. Studies13 indicate that the combined effect of well
established highly graded purchase and circulation tax systems in Italy and
Denmark has provided for a 20 per cent better fuel economy than that
prevailing in UK. Such tax systems can play an important role in the
uptake of cleaner vehicle technologies and low-carbon fuels.

11

Inland Revenue (2004), Report of the Evaluation of Company Car Tax Reform, Inland
Revenue, London.
12
Lane, Ben (2009): Is the car scrappage scheme helping the environment? Green Living
Blog, The Guardian 21, August 2009.
13
Potter, S. and Parkhurst, G., (2005), Transport Policy and Transport Tax Reform.
Public Money and Management, 25 (3), June 171-178

132

Table 6.3: Application of Economic Instruments in Various Countries

Country
Australia

Austria

Belgium

Brazil

Britain

Canada

Denmark

Finland

France
Germany

Greece

Hungary
Iceland

Ireland

Economic Instruments
Tax on sale or initial registration of vehicles. Rate of tax varies on the basis of value
of vehicles.
Higher annual registration fee on commercial vehicles compared to private vehicles
Environmental tax on car registration was introduced in 1992. While the base is the
selling price of cars the tax rate depends on the standard petrol consumption.
Since May 1, 1993, the annual vehicle tax on passenger cars is assessed on the basis
of engine power and no longer on cylinder volume. From January 1, 1995, cars without
catalytic converters are imposed a surtax of 20 percent.
At the same time, VAT on new vehicles was reduced from 32 percent to 20 percent
and the VAT rate on electric cars was cut by half to 10 percent.
Tax is based on net weight for buses and on loading capacity for trucks.
An annual tax on registration was introduced for new motorcars on June 1, 1992,
and it has been extended to in-use cars since June 1, 1993. This tax is based on the
engine power of the car.
Road tax on power (passenger transport vehicles) or weight (goods transport
vehicles) adjusted annually on 1 July with CPI.
Penalty system for violation of air pollution standards since 1981. Fines are
arbitrary as the level of emission from trucks is generally visually assessed. Fines are
related to frequency of violation rather than intensity or toxicity of pollution.
Sales tax on new cars (17.5 percent) and annual vehicle excise duty.
Higher taxes on commercial vehicle sales, ownership (excise duty based on axles
and weight) and use than on private cars.
A tax on purchase of fuel inefficient passenger and sport utility vehicles. A subsidy
of $100 is provided to cars with a highway fuel efficiency rating of less than 6 litres
per 100 km.
All provinces impose annual fees for the registration or use of motor vehicles. In
general, the fees depend on the type of vehicles and in most cases the weight of
vehicles.
Annual passenger car fuel consumption tax according to the fuel efficiency of
vehicle. The tax rates vary between 440 and 16100 DKK per year for petrol driven
vehicles and between 1720 and 22020 DKK per year for diesel driven passenger cars.
Annual tax on diesel vehicles and passenger cars of 150 FIM/I00 kg of weight, and
on delivery vans of27 FIM/I000 kg of weight.
Environmental taxes on cars, differentiated on the basis of whether or not these are
equipped with catalytic converters.
Annual tax on diesel driven vehicles levied on all vehicles using fuel other than
petrol.
Annual tax on motor vehicles levied on passenger cars and delivery vans 300 FIM/a
for old vehicles(registered before 1994) 500 FIM/a for new vehicles
Accelerated depreciations allowed for electrical vehicles.
Annual tax on motor vehicle not meeting the EU emission standards to accelerate
the introduction of cleaner vehicles. Rates are differentiated by age of the car.
A higher tax has been imposed on diesel cars as compared to petrol cars since 1994.
Since 1990, exemption from the road surtax and initial lump sum tax for a period of
5 years for new cars fitted with a catalytic convertor, subject to scrapping of old car by
the buyers of the new car. About 3 lakh old cars were scrapped.
New cars with catalytic convertors get a discount of Forint 50000 from
consumption tax.
IKr 330 is charged for a mandatory annual emission test. Inspection fee charged for
annual inspection of vehicles over 2 years old. Rate of charge is on the basis of weight
of vehicles.
Excise duty based on cylinder capacity of vehicles
Sales tax on retail price of private vehicles based on cylinder capacity.

133

Italy

Japan

Korea

Netherlands

Norway
Portugal
Singapore

Sweden

Turkey

United State

Australia
Belgium
Britain

Denmark

Road Tax on private cars based on cylinder capacity.

One-off Registration tax on purchase of new and used vehicles depending on type
and size of vehicles.
Annual tax on all motor vehicles and caravans. Tax levied in relation to cylinder
volume (light motorcycles), power (motorcycles, cars, coaches), load (lorries and
trailers or lump sum (caravans). Power is measured in fiscal CV- an ad-hoc unit based
on cylinder volume. Further, different rates of tax apply to petrol and gas oil motor
vehicles. Tax rates are the sum of components for central and regional governments;
the latter can be varied within limits by the regional authority and there is thus some
regional variation in overall tax rates.
Tax deductions for cars with low emissions, electric cars and cars on alternative
fuels.
One-off consumption tax on new or old car registration at 3 percent.
Annual tax in relation to power and load of vehicles.
Automobile Tax levied according to cylinder capacity.
Light vehicle tax levied on motorcycles and light vehicles according to cylinder
capacity.
Introduced environmental quality improvement charges, in 1991. Besides other
economic activities it covered vehicles (buses and trucks using diesel). The charge is
computed by the price of catalytic converter.
Vehicle excise duty levied according to type, weight, and fuel used.
Lower sales tax on cars that complied with future ED standards.
Consequently, share of future ED standard cars rose from 37% to 70%, faster than
expected by the government.
Vehicle excise duty levied according to type, weight, number of axles and fuel used.
Differentiated taxes on car prices, with a tax advantage given to cars fitted with
catalytic converters and cars powered by electricity or gas
Vehicle excise duty levied on cylinder capacity.
Additional registration charge at 150 percent, since 1983, of the cost of the car to
discourage ownership. A rebate on tax is given if an old vehicle is scrapped
simultaneously.
Vehicle taxes based on weight and environmental characteristics (.type, weight,
number of axles and fuel used)
Subsidy on cars with catalytic converters, special tax on cars without catalytic
converters.
Motor Vehicle Tax levied on 1111 motor vehicles based on weight, type and
cylinder capacity.'
Environment Fund at 25% of the Supplementary Motor Vehicles Acquisition Tax.
Higher excise tax (12 percent) on trucks, annual use tax on "heavy vehicles", excise
tax on tyres weighing over 40 pounds, a "Gas Guzzler" tax on automobiles with
unsatisfactory fuel economy ratings.
The Gas Guzzler excise tax is imposed on the sale of autos whose fuel efficiency is
less than 22.5 miles per gallon. The tax varies from $ 1000 to $ 7700 depending on the
fuel efficiency.
Non-conformance charge on heavy vehicles and engines are based on the degree of
non-compliance.
Petrol taxes were increased. Differential pricing for leaded and unleaded petrol was
introduced in favour of the latter.
Higher excise duty on leaded petrol.
Tax Differential has been gradually increased and now stands at 4.8 pence per litre.
The proportion of unleaded in total petrol sales rose to 50% in 1993 from a
negligible share in 1986. bullet in first line
Fuel tax based on C02 content at combustion was introduced in 1992.
Since the mid-1980s, differential tax on leaded and unleaded gasoline. In 1994 the
market share of unleaded petrol rose to nearly 100%.

134

Finland

Germany
Hungary

Ireland
Luxembourg
Mexico
Netherlands
New
Zealand
Norway
Sweden

Switzerland
Taiwan
Thailand
US
Chile
Norway

Singapore

Lower tax on lead free petrol than on leaded petrol since 1986.
Lower excise duty on sulphur free diesel since 1993.
Carbon tax on fuel since 1994.
Duty differential between leaded and unleaded petrol at the rate of DM 0.10 per
litre.
In 1992, a tax at the rate of 0.7% of the price was introduced on motor vehicle fuels.
The revenue is earmarked for environmental expenditure relating to vehicular
traffic.
Higher excise duty on leaded petrol than on the unleaded petrol.
Higher excise duty and VAT rates of 2-3% on leaded petrol than on unleaded petrol.
Higher excise tax on leaded petrol than on unleaded variety.
Environmental charges on fuel since 1988. These charges were revised in 1990 to
include CO2 emissions. Unleaded petrol was cheaper than leaded petrol.
Tax treatment in favour of unleaded petrol vis--vis leaded petrol. A fee of NZ$
0.066 i.e. US$ 0.039 per gram was levied on lead added to gasoline.
Fuel tax based on sulphur, carbon and lead content.
CO2 tax since 1991
High gasoline taxes. Differential tax in favour of unleaded petrol.
A carbon tax was imposed on motor and other fossil fuels since 1991. The part of
the tax levied on motor fuels amounted to SKI 0.58 per litre for petrol and 0.92 for
diesel. .
System of tax rebate for producers of cleaner diesel fuel since 1991.
The market share of unleaded petrol increased to 655 in 1992 due to a tax
differential of ECU 0.04/1 in favour of unleaded petrol.
Differential price in favour of unleaded petrol. This led to an increase in the market
share of unleaded petrol from 18.7 per cent in 1990 to 51.84 per cent in 1993.
Differential price in favour of unleaded petrol.
A surtax on leaded gasoline to finance the subsidy on unleaded gasoline.
Trade in lead credits, to phase out lead in gasoline in 1982-87.
In 1990, the city allocated bus transit rights and auctioned routes based on fares and
types of buses.
In 1986 to control congestion, the city of Bergen introduced toll for motorists
entering the city between 6 a.m. to 10 p.m. on weekdays. The rate is differentiated on
the basis of loading capacity of vehicles. The revenue so collected is used to finance
the construction of by-passes.
Implemented a licence ticket scheme for entering some identified zones during peak
hours. Fine for non-compliance was 10 times the licence price. It helped reduce the
traffic flow and thus pollution. These zones also have higher parking fee.

Notes: 1. In Norway, since 1995 gasoline tax differential was introduced for leaded petrol based on emissions of
lead per litre.
2. In Canada, British Columbia introduced permit fees on pollutant emissions in 1992. The fees are reduced if the
actual emissions are less than the permitted emissions.
Sources: Pandey and Bhardwaj (2000). Economic Policy Instruments for Controlling Vehicular Air Pollution,
Mimeo, National Institute of Public Finance and Policy, New Delhi.

135

Table 6.4.: Rates of UK Vehicle Excise Duty from 1st May 2009
Petrol car Tax Class 48
Alternative fuel
Car registered on or after 1 Diesel car Tax Class 49
car Tax Class 59
March 2001 based on CO2
Bands
CO2
12 month
Six month 12 month
Six month 12 month
Six month
emission
figure
(g/km)
Band A
Up to 100
0
0
0
Band B
101 to 110
35
35
15
Band C
111 to 120
35
35
15
Band D
121 to 130
120
66
120
66
100
55
Band E
131 to 140
120
66
120
66
100
55
Band F
141 to 150
125
68.75
125
68.75
105
57.75
Band G
151 to 165
150
82.50
150
82.50
130
71.50
Band H
166 to 175
175
96.25
175
96.25
155
85.25
Band I
176 to 185
175
96.25
175
96.25
155
85.25
Band J
196 to 200
215
118.25
215
118.25
200
110
Band K*
2001 to 225
215
118.25
215
118.25
200
110
Band L
226 to 255
405
222.75
405
222.75
390
214.50
Band M
Over 255
405
222.75
405
222.75
390
214.50
*Band K includes cars that have a CO2 emissions figure over 225g/km but were registered before 23 March 2006.
Source: Driver and Vehicle Licensing Agency 2009.

Taxes for Demand Management

As noted above, well-designed purchase and circulation taxes can
stimulate cleaner car technologies and fuels. These taxes have a small
direct influence on transport demand, but they can affect it indirectly. The
economics of low carbon vehicles are currently such that they have high
capital costs and lower running costs. The net impact of strong purchase
and circulation tax incentives is to reduce relative purchase costs, and the
parallel fuel tax concessions on cleaner fuels stimulates the take up of
fuel-efficient low-carbon cars with very low running costs. However,
extending the use of lower-cost, fuel-efficient vehicles will cut the cost of
motoring and this will promote car use.
The use of low-carbon vehicles reduces the adverse effects of
transport on the environment. But if this tax system in the transport sector
increases the use of these vehicles, then it will raise travel demand. This in
turn will reduce the savings in CO2 emissions from the low-carbon
vehicles. For improvements in fuel efficiency to be translated into reduced
overall emissions, tax (and other policy measures) are needed to impact
upon both vehicle design and vehicle use.
Giving New Thrust to Road Fuel Taxes
Taxation measures to influence transport demand need to be
positioned to influence not only the type of vehicles purchased, but
decisions about the amount of travel and mode of transport used.
Transport demand management measures include charges on using road

136

space such as bridge/tunnel tolls, road tolls and cordon/congestion

charging in city centres.
There are a number of reasons for road user charges becoming
important in the future. There are two key considerations as to whether
any new road user charges should replace or be in addition to fuel duties
and other taxes. Firstly, there is the view point that fuel and vehicle duties
serve important transport and environmental policy objectives that are not
addressed by road pricing. If fuel and vehicle excise duties were entirely
removed then this would sweep away the existing incentives for fuel
efficiency and the promotion of low-carbon fuels.
Secondly, studies modelling the impacts of a national road user
charge in the UK have suggested that replacing fuel duties with road user
charges in a revenue neutral package could actually increase traffic (and
emissions) because it would result in motoring costs falling in less
congested areas where traffic growth is already rising rapidly (e.g. rural
areas and city fringes). It would also lead to activity patterns of
redistributing vehicular transport to low-charge areas14. A green fiscal
reform involving a Fuel Duty Escalator-type arrangement with a
transparent reduction of other taxes would contribute to the reduction of
both congestion and emissions.
To conclude, taxes on purchase, circulation and fuel taxation can
be used to promote a variety of transport and environmental policy goals.
In exploring the use of these tax measures, it is important to distinguish
between policy measures to influence vehicle characteristics (technology,
the type of fuel used and fuel economy) as distinct from vehicle use. Welldesigned purchase and circulation taxes can stimulate cleaner car
technologies and fuels, but their incidence on car ownership rather than
use means that they are not an appropriate means of reducing traffic.
Indeed, if successful, they could increase road traffic if they were to
reduce the cost of motoring. Road fuel duties can be used to reduce traffic
as well as pursue other environmental policy goals related to transport.
Rather than replacing fuel duties, evidence is mounting that to manage
transport demand and transport emissions any shift to road pricing needs
to be in addition to (rather than a mere replacing) fuel and vehicle excise
duties.
14

Wenban-Smith, A. (2006), Road User Charging wider purposes and effects,

Seminar on Road User Charging: the big picture, Transport 2000, February 2006,
London.

137

7
Reforms in the
Structure of Road
User Taxes
The road user taxes are an instrument to regulate and control
the vehicles rather than to mobilise resources. This is amply clear from
the Constitutional provisions relating to motor vehicles tax and
passengers and goods tax, given in chapter 4.
Assessment of the Existing Taxes
An assessment of the existing structure of road user taxes
presented in chapters 4 to 6 suggest that the current system of road user
taxes is characterized by the following features:
Multiplicity of Taxes: Transport vehicles are taxed by different
tax structures. Some of the taxes are levied directly on the vehicle, the
others indirectly. The major taxes levied on the vehicle are CenVAT,
motor vehicles tax, passengers and goods tax, state VAT and octroi.
All these taxes, levied by different tiers of governments, subject the
transport industry in three different aspects viz. related to purchase of
vehicles, those concerning ownership of vehicles, and finally, those
affecting the operation of vehicles.
High Incidence of taxes: The overall burden of taxes on road
transport industry has to take into account the burden of all the taxes
directly on the vehicles, on its components (spares), on fuel, and finally
on the operation of vehicles, such as registration fee, motor vehicles
tax, license fee, passengers and goods tax, and permit fee. The rates of
taxes levied by the Central Government are uniform through out the
country. However, variations exist in the rates of taxes levied by the
States.

138

Table 7.1: Incidence of Tax on Motorcycle in India

[Motorcycle

with engine capacity 60cc, ULW 95 kg, cost Rs. 45,000]

Taxes on Operation of Vehicles

Taxes on Purchase of Vehicle

States

Andhra Pradesh
Arunachal Pradesh
Assam
Bihar
Chhattisgarh
Delhi
Goa
Gujarat
Haryana
Himachal Pradesh
Jammu & Kashmir
Jharkhand
Karnataka
Kerala
MP
Maharashtra
Manipur
Meghalaya
Mizoram
Nagaland
Orissa
Punjab
Rajasthan
Sikkim
Tamil Nadu
Tripura
Uttar Pradesh
Uttarakhand
West Bengal

Tax on Motor Vehicle

CenVAT
Rs.

StVAT
Rs.

2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880
2880

6525
5625
6075
5625
6300
5625
5625
5625
5625
5625
6075
5625
6075
5625
5625
5625
5625
5625
5625
5625
5625
5625
5625
5625
5625
5625
5625
5625
5625

Taxes on Ownership
of Vehicles

MVT

CST
Rs.
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900
900

One
time
Rs.
4050
400
3500
1200
1800
1220
2250
2700
500
1800
4000
1200
3600
2700
2250
3150
1125
1000
1500
1200
2000
1350
2250
1000
3600
1100
1600
1500
1560

Registration
Fee

Rs.

Driving
License
fee
Rs.

60
60
60
30
60
60
60
60
60
60
60
60
60
60
60
60
60
60
60
60
60
60
60
60
30
60
60
60
60

200
200
200
200
200
200
200
200
200
200
200
200
215
200
200
200
150
200
250
150
150
200
200
200
60
200
200
200
200

Total
Cost of
One
year
Driving

Tax on Fuel

Cess on
Petrol

88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88
88

CenVAT
Rs.
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442
442

VAT
on
Petrol
Rs.
1460
885
1139
1084
973
885
796
885
885
1106
885
885
1106
1151
1272
885
885
885
885
885
796
1216
1238
885
1327
885
1045
885
885

139

Rs.
16605
11480
15285
12449
13644
12300
13242
13780
11580
13102
15530
12280
15367
14047
13717
14230
12155
12080
12630
12230
12942
12762
13684
12080
14953
12180
12840
12580
12640

Table 7.2: Incidence of Tax on Motor Car (Personal) in India

[Motor car with engine capacity 1000 cc, ULW 1000 kg, Cost Price Rs. 5 lakh, floor area upto 5 Sq. Mtrs,
Seating capacity 5 person excluding driver and 14 HP, for personal use (Diesel Driven)]
Taxes on Operation of Vehicles
Taxes on Purchase of Vehicle

States

Andhra Pradesh
Arunachal Pradesh
Assam
Bihar
Chhattisgarh
Delhi
Goa
Gujarat
Haryana
Himachal Pradesh
Jammu & Kashmir
Jharkhand
Karnataka
Kerala
MP
Maharashtra
Manipur
Meghalaya
Mizoram
Nagaland
Orissa
Punjab
Rajasthan
Sikkim
Tamil Nadu
Tripura
Uttar Pradesh
Uttarakhand
West Bengal

Tax on Motor Vehicle

Taxes on Ownership
of Vehicles

MVT

Registration
Fee

Driving
License
fee

CenVAT
Rs.

StVAT
Rs.

CST
Rs.

One
time
Rs.

Rs.

Rs.

32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000
32000

72500
62500
67500
62500
70000
62500
62500
62500
62500
62500
67500
62500
67500
62500
62500
62500
62500
62500
62500
62500
62500
62500
62500
62500
62500
62500
62500
62500
62500

10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000

45000
2000
20000
3750
25000
20000
25000
30000
5000
12500
6000
15000
60000
2150
25000
35000
2925
2250
5000
2400
25000
10000
10000
12000
40000
27501
25000
25000
9900

200
200
200
200
200
200
200
200
200
200
200
200
200
200
400
200
200
200
200
200
200
200
200
200
200
200
200
200
200

200
200
200
200
200
200
200
200
200
200
200
200
215
200
200
200
150
200
250
150
150
200
200
200
60
200
200
200
200

Total
Cost of
One
year
Driving

Tax on Fuel

Cess on
Diesel
(Rs.)

CenVAT
Rs.

458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458
458

2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290
2290

VAT
on
Diesel
(Rs.)
5095
4579
3549
4204
5037
4579
4350
4808
2015
3206
4579
3297
4579
5150
5266
5266
4579
4579
4579
4579
4121
2015
4121
4579
4907
2862
3700
4808
4579

140

Rs.
167742
114227
136197
115602
145185
132227
136998
142456
114663
123353
123227
125945
177242
114947
138114
147914
115102
114477
117277
114577
136719
119663
121769
124227
152415
138011
136348
137456
122127

Table 7.3: Incidence of Tax on Ordinary Private Stage Carriage

(Total distance permitted to be covered 150 kms per day, ply on other than town
routes, permitted to carry 25 passengers, Total Cost Rs. 10 lakh)
Taxes on Ownership of
Vehicles

Taxes on Operation of Vehicles

Taxes on Purchase of Vehicle

Drivin
g
Licens
e fee
Rs.

Permit fee

Passenger
Tax

Rs.

Rs.

400

200

15000

Registrati
on Fee
States

Andhra
Pradesh
Arunachal
Pradesh
Assam
Bihar
Chhattisgar
h

Tax on Motor Vehicle

CST
CenVA
StVAT
T Rs.
Rs.
64000
145000
20000

MVT
(annual)
Rs.
2444

Rs.

Tax on Fuel
Total
Cost

NA

Cess on
Diesel
(Rs.)
10759

CenVA
T
Rs.
53794

VAT
Diesel
Rs.
119692

431289
64000

125000

20000

40000

400

200

15000

NA

10759

53794

107588

64000
64000

135000
125000

20000
20000

8000
5000

400
400

200
200

15000
15000

NA
No Tax

10759
10759

53794
53794

83381
98766

64000

140000

20000

10000

400

200

15000

NA

10759

53794

118347

64000

125000

20000

3875

400

200

15000

No Tax

10759

53794

107588

64000

125000

20000

1250

400

200

15000

NA

10759

53794

102209

64000

125000

20000

3480

400

200

15000

10759

53794

112968

432500
400616
392612

Goa
159687.5

565288

Gujarat
64000

125000

20000

13750

300

200

15000

228125

10759

53794

47339

64000

125000

20000

12500

400

200

15000

365000

10759

53794

75312

64000

135000

20000

4000

400

200

15000

NA

10759

53794

107588

64000

125000

20000

400

200

15000

NA

10759

53794

77464

64000

135000

20000

400

215

15000

No Tax

10759

53794

107588

578267
741965
410741
366617

Jharkhand
50000

Karnataka

456756
64000

125000

20000

60000

400

200

15000

NA

10759

53794

120983

64000

125000

20000

63000

600

200

15000

NA

10759

53794

123727

64000

125000

20000

1775

400

200

15000

NA

10759

53794

123727

64000

125000

20000

1720

400

150

15000

1580

10759

53794

107588

64000

125000

20000

2500

400

200

15000

6175

10759

53794

107588

64000

125000

20000

2500

400

250

15000

1400

10759

53794

107588

Kerala
MP
Maharashtr
a

470136
476080
414655

Manipur

399991
405416

Meghalaya
Mizoram

400691
64000

125000

20000

3000

400

150

15000

NA

10759

53794

107588

64000

125000

20000

18700

400

150

15000

No Tax

10759

53794

96829

Nagaland

399691

Orissa

404632
64000

125000

20000

16250

400

200

15000

64000

125000

20000

10000

400

200

15000

64000

125000

20000

3125

400

200

15000

64000

125000

20000

50000

200

60

15000

NA

10759

53794

47339

10759

53794

96829

NA

10759

53794

107588

No Tax

10759

53794

115281

Punjab

352742
30000

425982

Rajasthan
Sikkim

399866

Tamil Nadu
Tripura
Uttar
Pradesh
Uttarakhand
West
Bengal

436741
390534
392919

Delhi

Haryana
Himachal
Pradesh
Jammu &
Kashmir

Rs.

454094
64000

125000

20000

1375

400

200

15000

NA

10759

53794

67243

64000

125000

20000

3060

400

200

15000

NA

10759

53794

86931

64000

125000

20000

3060

400

200

15000

NA

10759

53794

112968

64000

125000

20000

3125

400

200

15000

No Tax

10759

53794

107588

357771
379144
405181
399866
Note: NA: Not Available

141

Table 7.4: Incidence of Road Tax on Goods Carriages

[with Laden Weight or Gross Vehicle Weight 10,000 kg (10 M.T.), Carrying
Capacity 8,000 kg (8 MT), and Cost Price Rs. 10 lakhs]
Taxes on
Ownership of
Vehicles

Taxes on Purchase of
Vehicle

Drivin
g
Licens
e fee
Rs.

Permit fee

Goods/
Passenger
Tax

Rs.

Rs.

400

200

15000

400

200

Registrati
on Fee

States
Andhra Pradesh
Arunachal
Pradesh
Assam

Tax on Motor Vehicle

CST
CenVA
StVAT
T Rs.
Rs.
64000
145000
20000

MVT
(annual)
Rs.
9748.2

Taxes on Operation of Vehicles

Rs.

Tax on Fuel
Total
Cost

NA

Cess on
Diesel
(Rs.)
8020

CenVA
T Rs.
40100

VAT
Diesel
Rs.
89223

15000

NA

8020

40100

80200

391691
64000

125000

20000

2960

64000
64000

135000
125000

20000
20000

7000
5500

400
400

200
200

15000
15000

NA
No Tax

8020
8020

40100
40100

62155
73624

64000

140000

20000

2400

400

200

15000

NA

8020

40100

88220

64000

125000

20000

3320

400

200

15000

No Tax

8020

40100

80200

64000

125000

20000

4900

400

200

15000

NA

8020

40100

76190

64000

125000

20000

6550

400

200

15000

NA

8020

40100

84210

64000

125000

20000

2400

300

200

15000

NA

8020

40100

35288

64000

125000

20000

2000

400

200

15000

8020

40100

56140

Bihar

355880
351875
351844

Chhattisgarh

378340
356240

Delhi
Goa

353810

Gujarat
Haryana
Himachal
Pradesh
Jammu &
Kashmir

Rs.

363480
310308
40000

370860
64000

135000

20000

64000

125000

20000

64000

135000

20000

4400

400

200

15000

NA

8020

40100

80200

400

200

15000

NA

8020

40100

57744

400

215

15000

No Tax

8020

40100

80200

367320
NA

330464

Jharkhand
7200

Karnataka

370135
64000

125000

20000

8360

400

200

15000

NA

8020

40100

90184.9

64000

125000

20000

8400

600

200

15000

NA

8020

40100

92230

64000

125000

20000

7500

400

200

15000

NA

8020

40100

92230

64000

125000

20000

3280

400

150

15000

3000

8020

40100

80200

64000

125000

20000

3120

400

200

15000

6568

8020

40100

80200

64000

125000

20000

3710

400

250

15000

2500

8020

40100

80200

Kerala

371265

MP

373550

Maharashtra

372450

Manipur

359150
362608

Meghalaya
Mizoram

359180
64000

125000

20000

2410

400

150

15000

NA

8020

40100

80200

64000

125000

20000

4955

400

150

15000

No Tax

8020

40100

72180

64000

125000

20000

3410

400

200

15000

NA

8020

40100

35288

64000

125000

20000

13350

400

200

15000

8020

40100

72180

Nagaland

355280

Orissa

349805
311418

Punjab
4000

362250

Rajasthan
64000

125000

20000

4033

400

200

15000

NA

8020

40100

80200

64000

125000

20000

7600

200

60

15000

No Tax

8020

40100

85934

Sikkim

356953

Tamil Nadu

365914
64000

125000

20000

2100

400

200

15000

NA

8020

40100

50125

64000

125000

20000

3400

400

200

15000

NA

8020

40100

64802

324945

Tripura
Uttar Pradesh

340922
64000

125000

20000

3400

400

200

15000

NA

8020

40100

84210

64000

125000

20000

3700

400

200

15000

No Tax

8020

40100

80200

Uttarakhand

360330

West Bengal

356620
Note: NA: Not Available

142

The estimates of combined incidence of tax on passengers and

goods vehicle in the different states is a stupendous task for the simple
reason that neither there is a uniformity in the base, nor in rates. We
have, therefore, attempted to estimate the incidence of taxes on a
sample vehicle. In the case of a motor cycle we take a model bike with
engine capacity of 60cc, with ULW of 95 kg, and with the purchase
price of Rs. 45,000. To estimate the tax on fuel we presume that the
would run 6300 km per year. This is based on the estimates of Report
of the Expert Group on A Viable and Sustainable System of Pricing of
Petroleum Product (Government of India, Feb. 2010, Table 1). The
estimates for different type of vehicles are given in Tables 7.1 through
7.4, which is in the range of Rs. 12,000 to 17,000. Similarly, the
incidence of all the taxes on a personal diesel driven car with engine
capacity 1000 cc, ULW 1000 kg, 14 HP, cost price of Rs. 5 lakh, floor
area 5 Sq. Mtrs, seating capacity of 5 person excluding driver is
estimated to be Rs. 1 lakh. (see Tables 7.1 to 7.4).
Barriers to inter-state movement: An important feature of the
existing tax system is the existence of a large number of check points.
Although the importance of these check points lies in the fact that these
posts help the department to monitor the flow of goods into the state,
these check points, interfere with the flow of trade and traffic and
cause harassment to a large body of transporters, the majority of whom
are not liable to pay any tax. In fact, studies undertaken regarding the
efficiency of the check points in different states reveal that the larger
the number of check points cause considerable waste of time arising
from the stoppage of traffic. Even a conservative estimate shows that
the money value of the loss of time suffered by the transporters due to
the check points is tremendous. Also, the existence of a large number
of check points is a source of irritation and harassment to the
transporters. In fact, it is generally agreed by administrators as well as
policy makers that the check points are a source of corruption. Hence,
it is a sound policy to keep their number down to the barest minimum.
In fact, the Government should replace transport check gates with the
integrated check gates combining check posts of sales tax, forest etc.
into one.
Corruption: The procedures of assessment and collection,
cause waste of time and provide high degree of discretion in the
assessment of these taxes, especially when the tax is levied according
to the weight or passengers carried. This generates an agency of
intermediaries and consequently causes corruption.

143

Reforms in Road User Taxation

The assessment of the motor vehicles tax and other taxes on
goods and vehicles indicates that it is important to take note of the
above aspects and introduce reforms in the existing rate structure of
road user taxation. While efforts have been made in India to reform the
existing commodity taxes to have an efficient and neutral tax system,
so far no attempt has been directed towards these taxes.
The existing structure shows wide variations in tax rate. In fact,
it is difficult to make comparisons of rates levied on different types of
vehicles in different states. First, there are differing schemes for
classification of vehicles. Second, there is no uniformity in the bases of
various levies. Third, the tax is at times specific while in some cases it
is ad valorem. Finally, in some states there is a one time levy and in
others there is an ad valorem levy payable every year.
To illustrate, in the case of scooters (two wheelers), some states
levy on the basis of the capacity of engine defined in terms of CC
while in others it is on the basis of unladen weight (ULW). Andhra
Pradesh and Maharashtra levy on ad valorem basis. Karnataka, Tamil
Nadu and West Bengal adopt the basis of CC, while states like Bihar,
Gujarat, Haryana, Himachal Pradesh, Kerala, Madhya Pradesh, Orissa,
and Uttar Pradesh levy tax based on ULW. Similarly, in the case of
cars, the rate of tax on personal cars is levied on the basis of ULW and
also on the basis of the number of built in seats. Bihar and Punjab levy
the tax on the basis of the number of seats while, Andhra Pradesh,
Gujarat, Himachal Pradesh, Karnataka, Kerala, Maharashtra, Orissa,
Tamil Nadu and West Bengal follow the basis of ULW. Likewise, in
the case of passenger transport vehicles, like stage or contract carriage,
the seating capacity and the route length on which the carriage plies,
form the base of levying tax. The period of payment also varies; some
states charge the tax quarterly while others charge, annually. The tax
on goods transport vehicles is primarily based on weight, i.e. registered
laden weight (RLW) or unladen weight (ULW). The tax rates on
specific categories of vehicles are given in Tables 7.5 to 7.7. These are
the taxes levied on different stages such as purchase of vehicles,
ownership of vehicles and operation of vehicles.
In view of the varying structures of base, rates, nature and the
types of taxes levied in different states, it is important that the tax
system should be reformed in such a way that it is (i) neutral, (ii)
efficient in allocation of resources, (iii) administratively expedient and
(iv) avoids cascading in the economy. Keeping these objectives in

144

Table 7.5: Tax on Motorcycle in India

[Motorcycle with engine capacity 60cc, ULW 95 kg, cost Rs. 45,000]
Taxes on Purchase of
Vehicle
States

Andhra
Pradesh
Arunachal
Pradesh
Assam
Bihar
Chhattisgarh
Delhi
Goa
Gujarat
Haryana
Himachal
Pradesh
Jammu &
Kashmir
Jharkhand
Karnataka
Kerala
MP
Maharashtra
Manipur
Meghalaya
Mizoram
Nagaland
Orissa
Punjab
Rajasthan
Sikkim
Tamil Nadu
Tripura
Uttar
Pradesh
Uttarakhand
West
Bengal

Tax on Motor Vehicle

Taxes on
Ownership of
Vehicles
Reg.
MVT
Fee

CenVAT

SVAT

CST

One
time

14.5

4050

60

Taxes on Operation of Vehicles

DL
fee

200

Tax rates fuels

CenVAT

VAT
on
Petrol

VAT
on
Diesel

10

33

22.25

10
10
10
10
10
10
10

25.75
24.5
22

20

15.5
18.36
22
20
19
21
8.8

25

14

20
25
26.03
28.75

14.4

12.5

8
8
8
8
8
8
8

13.5
12.5
14
12.5
12.5
12.5
12.5

2
2
2
2
2
2
2

3500
1200
1800
1220
2250
2700
500

10

12.5

1800

60

10

13.5

4000

60

10

8
8
8
8
8
8
8
8
8
8
8
8
8
8
8

12.5
13.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5

2
2
2
2
2
2
2
2
2
2
2
2
2
2
2

3600
2700
2250
3150
1125
1000
1500

60
60
60
60

12.5

12.5

12.5

30
60
60

200

60

200

215
200

150

10
10
10
10
10
10
10
10
10
10
10
10
10
10
10

60
60
60
60

250
150
150
200

30

60

1600

60

200

10

1500

60

200

10

1560

2000
1350
2250
1000
3600
1100

18

22.49
23
23

20

18
27.5
28

18
8.8
18

30
20

21.43
12.5

23.62

16.16
21

10

145

Table 7.6: Tax on Motor Car (Personal) in India

[Engine capacity 1000 cc, ULW 1000 kg, Cost Price Rs. 5 lakh, floor area upto 5 Sq.
Mtrs, Seating capacity 5 person excluding driver and 14 HP, for personal use (Diesel
Driven)]
Taxes on
Ownership of
Vehicles
Reg.
MVT
Fee

Taxes on Purchase of
Vehicle
States

Andhra
Pradesh
Arunachal
Pradesh
Assam
Bihar
Chhattisgarh
Delhi
Goa
Gujarat
Haryana
HP
J&K
Jharkhand
Karnataka
Kerala
MP
Maharashtra
Manipur
Meghalaya
Mizoram
Nagaland
Orissa
Punjab
Rajasthan
Sikkim
Tamil Nadu
Tripura
Uttar Pradesh
Uttarakhand
West Bengal

Motor Vehicle
CenVAT

SVAT

CST

One
time

14.5

45000

12.5

8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8
8

13.5
12.5
14
12.5
12.5
12.5
12.5
12.5
13.5
12.5
13.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5#
12.5
12.5

2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2

200

Taxes on Operation of Vehicles

DL

200

Tax rates fuels

CenVAT

VAT
on
Petrol

VAT
on
Diesel

10

33

22.25

25.75
24.5
22

15.5
18.36
22
20
19
21
8.8
14

10
20000
3750
25000
20000
25000
30000
5000
12500
6000
60000
2150
25000
35000
2925
2250

25000
10000
10000
12000
40000
27501
25000
25000
9900

200
200
200

200

200
200

200

200
200
400
200

215
200

150
200
200
200
200

250
150
150
200

200

60

200
200

200
200

10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10

18
20
25
20
25
26.03
28.75

14.4
22.49
23
23

20

18
27.5
28

18
8.8
18

30
20
23.62

21.43
12.5
16.16
21

Note: #: 2% of additional tax with effect from 19 February 2010. All types of motor vehicles including chassis thereof, but
excluding tractors.

146

Table 7.7: Tax on Ordinary Private Stage Carriage

(Total distance permitted to be covered 150 kms per day, ply on other than town routes,
permitted to carry 25 passengers)
Taxes on Purchase of
Vehicle
Motor Vehicle

States

CenV
AT

SVAT

CST

14.5

12.5

Assam

13.5

Bihar
Chhattisgarh
Delhi
Goa

8
8
8
8

12.5
14
12.5
12.5

Gujarat

Haryana

Andhra
Pradesh
Arunachal
Pradesh

Taxes on
Ownership of
Vehicles
Reg.
MVT
Fee
per
year
2444.4

Taxes on Operation of Vehicles

DL

Permit
fee

P&G
Tax

Medium
MPV
400

Cen
VA
T

VA
T on
Petr
ol

VAT
on
Diesel

33

22.25

15000

NA

10

15000

NA

10

8000

15000

NA

10

2
2
2
2

5000
10000
3875

15000
15000
15000
15000

10
10
10
10

12.5

3200

12.5

13750

300

12.5

12500

400

No Tax
NA
No Tax
NA
17.5%
of fare
25% of
fare
40% of
fare

15000

NA

10

400
400

200

Tax rates fuels

200

15000
200

15000

8.8

10

25

14

20
25
26.0
3
28.7
5

14.4

4000

8
8

12.5
13.5

2
2

12500

400

215

15000
15000

NA
No Tax

10
10

Kerala

12.5

60000

400

200

15000

NA

10

MP

12.5

48000

600

15000

NA

10

Maharashtra

12.5

1775

400

15000

10

Manipur

12.5

1720

Meghalaya

12.5

2500

Mizoram

12.5

25000

400

250

15000

Nagaland
Orissa
Punjab

8
8
8

12.5
12.5
12.5

2
2
2

18700
18979

400
400
400

150
150
200

15000
15000
15000

Rajasthan

12.5

10000

Sikkim
Tamil Nadu
Tripura

8
8
8

12.5
12.5
12.5

2
2
2

3125
50000
875

NA
Rs.158
0/-p.a
Rs.656
8/-pa.
(or Rs.
247/pp
Rs.
1400/p.a.
NA
No Tax
NA
3%
cost of
Vehicle
NA
No Tax
NA

15000

15000

200

60

15000
15000
15000

21
20

13.5

15000

15.5
18.36
22
20
19

10

150

18

10

Himachal
Pradesh
Jammu
& Kashmir
Jharkhand
Karnataka

15000

25.7
5
24.5
22

10

22.49
23
23

20

10

10
10
10
10

18
27.5

18
8.8

10

28

18

30
20
23.6
2

21.43
12.5

10
10
10

Uttar Pradesh

12.5#

765

400

200

15000

NA

10

Uttarakhand
West Bengal

8
8

12.5
12.5

2
2

765
3125

400

200

15000
15000

NA
No Tax

10
10

16.16
21

Note.: #: 2% of additional tax with effect from 19 February 2010. All types of motor vehicles including chassis thereof, but excluding tractors

147

view, we present below reforms in the rates and the bases of the road
user taxation.
In view of the varying structures of base, rates, nature and the
types of taxes levied in different states, it is important that the tax
system should be reformed in such a way that it is (i) neutral, (ii)
efficient in allocation of resources, (iii) administratively expedient and
(iv) avoids cascading in the economy. Keeping these objectives in
view, we present below reforms in the rates and the bases of the road
user taxation.
Uniformity in the structure: Lack of uniformity in the structure
of motor vehicles tax and passengers and goods tax as well as the
discretion in assessing the actual tax payable by the owner of vehicle
not only causes diversion of vehicle registrations, but also encourages
corruption in the system. It is, therefore, essential to have uniformity in
the tax system in all the states.
One-time tax: Some of the taxes, such as road tax, levied on
most of the users not involved in commercial activities, could fruitfully
be collected as one-time tax. This would not only save administrative
costs of handling the same taxpayer perpetually but also save time and
compliance costs of taxpayers. Many states have already implemented
one-time (life-time) tax. It is high time that others also follow suit.
However, keeping in view the issues of pollution emission through
vehicles, the one time tax should be limited to the first ten years of the
life of the vehicle. Thereafter, based on the emission of the vehicle and
its age the charge should be graduated over time. The vehicle should be
condemned after 20 years of life.
A combined tax on vehicles, passengers and goods: Although
the objectives of motor vehicles tax and the passengers and goods tax
were initially different, over period of time both the taxes are
structured and administered by the same department with primarily the
same objectives. It is, therefore, important that the motor vehicle and
passengers and goods tax be levied through one tax, as is being done
by some of the states. The combined incidence of tax could be worked
out to have one rate and one administration for the combined tax. It
could be known as Vehicle Tax for personal vehicles and Road Tax for
the commercial vehicles. In addition, the combined tax should be based
on cost of purchase of vehicles. Since the purchase price automatically
flows from manufacturers, it takes away the discretion of the officer
dealing with assessment of tax liability of vehicles. In addition, if
necessary some of the additional factors of occupancy/ length of routes
or goods carried be used for transport vehicles. To ensure that there is

148

no interaction with the taxpayer and the discretion is not with the tax
official, the tax liability should be indicated through a ready reckoner.
Ad valorem rate: The rate of the tax must be ad valorem. The
comparative picture of different taxes levied by all the states, indicates
that to have buoyancy in the tax system, it is useful to resort to a tax
system that is based on cost of purchase of vehicles with additional
factors of (i) occupancy and (ii) length of routes or goods carried. The
purchase price, which automatically flows in from the manufacturers,
would take away the discretion of the administrative assistant (RTI) or
the officer (RTO) dealing with assessment of tax liability of vehicles.
The tax liability should be indicated through a ready reckoner.
Encouraging national permit: The national permits for stage
and contract carriage as also for public and private carriers are fixed
for three to five years. The procedure for grant of such permits for
private carriers is relatively simple than for stage carriage and public
carriers. For the national permits an annual composite fee per state
(other than the home state, where full taxes have to be paid) is charged
in lieu of the countersignature fee. Thus, prescribed fee is marginally
lower than the full taxation for other inter-state permits and singlepoint taxation. Notwithstanding the low tax incidence of the national
permits, it would be desirable for the smooth flow of goods and
passengers across states to encourage the use of national permits. It is
suggested that there should be no freezing of the number of such
permits. Also, attempts must be made to have proper evaluation of the
incidence of tax through national permit. If necessary, the composite
tax could be increased to have parity with the existing state taxes on
vehicles. Above all, the procedure for issue of such permits must be
further simplified. This would help augmenting long-distance goods
movement in the country.
Pollution abatement incentives: Some incentive could be built
into the tax system to give initiative for the use of non-polluting
instruments in each of the vehicles. The structure of tax on motor
vehicles in other countries, as presented in chapter 6, reveals that most
countries follow differentiation on the basis of fuel, use of catalysts or
use of leaded or unleaded petrol. It is, therefore, useful to adopt built-in
fiscal incentives for pollution abatement.
Tax incentives for other policy objectives: In addition to
incentives for pollution abatement, it is advisable to use taxes on road
transport as an instrument that could achieve certain policy objectives.
First, these taxes could be introduced in such a way that they
encourage the use of multi-axled vehicles (MAVs). This is important in

149

the context of over-loading of two-axled vehicles (TAVs) and their

consequent damage to the roads. Here it is important to note that the
damaging power of vehicles increases exponentially with their weight.
A nominal increase of 10 percent over the permissible loading can lead
to a reduction of about one-third in the pavement life necessitating
much earlier investment for pavement strengthening. While movement
of goods by road has increased over time, the introduction of MAVs
has been rather slow. TAVs continue to account for a major proportion
(approximately 96 percent) of the total goods fleet in the country.
Transportation of heavy loads without causing excessive damage to
pavement can be best achieved by using MAVs, as they can distribute
the load on the pavement uniformly. Also, these vehicles are fuelefficient, economical and facilitate container movement. Studies
indicate that MAVs can affect savings ranging between 4 and 6 percent
for transport operators but could reduce pavement cost by 8 percent.
Second, the tax concession should be used to have noise-reduction and
high value vehicles. That is, the tax rate could be inversely related to
noise pollution and positively to the value of vehicles.
Total Tax Revenue from Road User Taxes be made to follow the
Objectives of Vehicle Taxation: Currently the total tax burden on
vehicles is through tax on purchase, on tax on ownership, and through
tax on operations. The taxes levied on the purchase account for 63%,
and tax on fuel 11%. Only about 1/4th of the tax on the vehicles could
be made to follow some principles under the present tax policy frame.
Taxes on purchase and ownership should motivate manufacturer to
develop low carbon engine vehicles (use of catalyst) and people to buy
them. Taxes on use of vehicle should incentivize the use of a particular
type of fuel. Fuel duties can be used to reduce traffic as well as pursue
other environmental policy goals related to transport. The State-VAT
on fuel and on vehicles should be reduced to the normal state-VAT rate
(or now GST rate) and any additional tax be levied on the principles of
MVTs. Incidence of the tax on use would suggest that the there could
be some other appropriate means of commuting. This would help
reducing traffic.
Abolition of octroi: Various committees have recommended
abolition of octroi because it is highly regressive, hampers growth of
trade as well as industrial activities, and wastes considerable amount of
time of the transporters. The main irritant of the tax is corruption at the
octroi barriers and hindrance in the free flow of goods in the country.
Following such recommendations most of the states, as stated earlier,
have replaced this tax by an entry tax - an account based levy mainly in
the form of a piggy back to the sales tax. The tax now exists in 16

150

municipal corporations of Maharashtra only. The time is now ripe to

abolish the tax in these municipal corporations as well.
The reforms suggested above would have a rational and
efficient tax policy for the transport sector. At the state level, it would
be extremely important to have free flow of inter-state trade and
commerce.
Annexure A.7.1
Assumptions for Calculating Tax Burden of Newly Purchased
Vehicle for the First Year of Purchase
Type of
Vehicle
Motor
Cycle1

Motor Car
(Personal) 1

Bus
(Ordinary
Private
Stage
Carriage) 1

Truck
(Goods
Carriages) 1

Feature of
vehicle

Base price
of CST

Base price for

StVAT

Rate of
CST

Tax on fuel

Engine Capacity 60
CC
ULW 95 kg
Cost Market price
Rs. 45000

80% of Market
price of vehicle
is taken for CST
Tax Rate @8%

Tax imposed on Market

price of Vehicle
Tax Rate as per the
existing rates in
differed states.

Tax imposed
on market
price of
Vehicle
Tax Rate
@2%

[Motor car with

engine capacity
1000 cc,
ULW 1000 kg,
Cost Price Rs. 5
lakh,
floor area upto 5
Sq. Mtrs,
Seating capacity 5
person excluding
driver
14 HP, for personal
use
Diesel Driven
Total distance
permitted to be
covered 150 kms per
day,
ply on other than
town routes,
.permitted to carry
25 passengers,
Total Cost Rs. 10
lakh)

Factory cost of
vehicle assumed
80% of Market
price taken for
CST
Tax Rate @8%

Tax imposed on Market

price of Vehicle
Tax Rate as per the
existing rates in
differed states.

Tax imposed
on market
price of
Vehicle
Tax Rate
@2%

Annual consumption of petrol 86

liters (average distance covered by
motorcycle assumed 6300 km and
petrol consume 1litre for 73 km) 2
Price of petrol in Delhi Rs.51.43 per
liter
Cess on petrol @2%
CenVAT on Petrol @ 10%
StVAT rates are different for different
state
Annual consumption of Diesel 571
liters (average distance covered by
motor car assumed 8000 km and
diesel consume 1litre for 14 km) 2
Price of diesel in Delhi Rs.40.10 per
liter
Annual cost of diesel Rs.22897
Cess on diesel @2%
CenVAT on diesel @ 10%
StVAT rates are different for different
state

Factory cost of
vehicle assumed
80% of Market
price taken for
CST
Tax Rate @8%

Tax imposed on Market

price of Vehicle
Tax Rate as per the
existing rates in
differed states.

Tax imposed
on market
price of
Vehicle
Tax Rate
@2%

Laden Weight or
Gross Vehicle
Weight 10,000 kg
(10 M.T.),
Carrying Capacity
8,000 kg (8 MT),
and
Cost Price Rs. 10
lakhs]

Factory cost of
vehicle assumed
80% of Market
price taken for
CST
Tax Rate @8%

Tax imposed on Market

price of Vehicle
Tax Rate as per the
existing rates in
differed states.

Tax imposed
on market
price of
Vehicle
Tax Rate
@2%

Annual consumption of Diesel 13415

liters (average distance covered by
bus assumed 55000 km and diesel
consume 1litre for 4.1km) 2
Price of diesel in Delhi Rs.40.10 per
liter
Annual cost of diesel Rs.537941.5
Cess on diesel @2%
CenVAT on diesel @ 10%
StVAT rates are different for different
state
Annual consumption of Diesel 10000
liters (average distance covered by
truck assumed 3000 km and diesel
consume 1litre for 3.34km) 2
Price of diesel in Delhi Rs.40.10 per
liter
Annual cost of diesel Rs.401000
Cess on diesel @2%
CenVAT on diesel @ 10%
StVAT rates are different for different
state

Notes: 1Rates of motor vehicle tax and passenger and goods tax are given in Annexure to Chapter 4.
2 Source: Government of India (2010), Report of the Expert Group on A Viable and Sustainable System of Pricing of Petroleum Products ,
February, New Delhi. Table 1

151

8
Management of
Road User Taxes
The desired objectives of a tax cannot be achieved unless it is
properly administered. In fact, as stated by Milka Casanegra, an expert
from the fiscal affairs department of the International Monetary Fund,
in developing countries such as India, tax administration is tax
policy.1 Also, it is important to realise that failure to properly
administer the tax defeats its very purpose and threatens the canon of
equity because only those who cannot avoid it then make full payment
of the tax. Thus, a badly administered tax further increases the evasion
of tax affecting adversely the morale of the honest tax payers.
Consequently, the administrator collects large proportion of tax from
easy-to-tax sectors2 and increases inter-sector inequity in the incidence
of the tax.
Improvement in the administration of the tax is, therefore, of
paramount importance. This could be attempted by improving the
activities that the Department performs. Broadly speaking, the motor
vehicles tax department as any other tax department performs two
types of activities, viz., the functional and the institutional. While the
former is performed to fulfil the purposes for which the department
exists, the latter refers to the type of activities the department must
concern itself with, in order to enable it to serve as a department. In
1

Casanegra de Jantscher, Milka (1990), Administering the VAT in Value-Added

Tax in Developing Countries, ed. by Malcolm Gillis, Carl S. Shoup, and Gerardo P
Sicat, World Bank, Washington; p. 179.
2
Bird, Richard M. and Milka Casanegra de Jantscher (Eds) (1992), Improving Tax
Administration in Developing Countries, International Monetary Fund, Washington,
D.C., p.1

152

fact, the institutional activities relate to the pattern of internal

organisation that can directly contribute success in the execution of the
primary or the functional activities of the department. A proper and
effective performance of these activities is, therefore, crucial to any
study of the organisation.
An efficient and vibrant road transport system is the important
ingredient for the long-term socio-economic and cultural prosperities.
It has direct bearing on the quality of the life of the people. With
enormous implications embodied, the efficacy of road transport system
is inextricably linked with the types and extent of regulatory,
management and administrative setup in the State.
The MV Act of 1939 laid the foundation of formal
administrative machinery in road transport. The old enactment has
been replaced by a new enactment known as Indian Motor Vehicles
Act, 1988 and Central Motor Vehicles Rules, 1989, prescribing some
changes in the administrative machinery for the tax.
The Act, besides enforcing restrictions on the movements of
vehicles on road in terms of registrations, licensing, permits and
penalties prescribes elaborate procedures and rules, ensures the
creation of State and Regional Transport Authorities at State and
District level all over the country in complete collaboration with Police
Department.
Over time, the administrative structure of the road transport in
the States have been reshaped, streamlined and more reorganized from
time to time with the subsequent enactment of Motor Vehicles Acts
and their amendments.
Organization for Administration
With about 90 crore registered vehicles and annual generation
of Rs. 15,143 crore (in 2007-08) revenue for the States exchequer, the
administrative machinery of the road transport department of the States
functions in a multidisciplinary approach. Its administration is manned
by combined network of civil servants, automobile engineers, police
personnel, statisticians and judicial experts.
The main objectives of transport administration are:
To maintain and improve
management for the department personnel.

the

skill

To ensure transparency in the day-to-day

management and administration of the officials.

153

To enhance the scope of additional resource

mobilization in road transport sector.
To provide a road user friendly transport
administration in the State.
To protect the public interest by making their
mobility safe and comfortable on road.
To expedite the process of modernization for
a more efficient, vibrant and productive road transport
management system in the State.
Structure and Functions
The Motor Vehicle Department in each State is headed by the
Transport Commissioner, under the Transport Department of the State
Commissionarate is the apex body for enforcing & regulating road
transport administration in the State. It discharges its responsibilities
through the following administrative network:
A. Head Quarters Organization: Transport Commissioner as
the head of the State Transport Authority ensures
appropriate implementation of provision
of Motor Vehicles Act and Rules made there under;
regulation of passenger and goods
transport by road for delivering an efficient, convenient
and safe transport system to the population of the State;
and
collection

of

Motor

Vehicles

Tax

revenue.
All the RTOs, Border Check gates, Dy Commissiners offices
and Driving Training School are under the administrative control of
Transport Commissioner.
In most of the States the following officers manage the
operations of the tax.
i.) Addl Commissioner, Transport (Administration): One
senior officer from State Administrative Service holds the post of Addl
Commissioner Transport (Admin) which has overall responsibility of
maintaining administrative discipline and reforms in the department.
ii.) Addl. Commissioner, Transport (Enforcement): One
senior officer from Indian Police Service in the rank of D.I.G holds the

154

post of Addl. Commissioner of Transport to ensure timely and

effective enforcement of the MV Act and Rules.
iii.) Secretary, State Transport Authority -cum-Addl
Commissioner, Transport (Permit): The post is discharged by one
Senior State Administrative Service Officer who is responsible for
issuing inter-district permits, inter-state permits to stage carriages and
national permits to goods vehicle to ply in other states.
iv.) Additional Commissioner, Transport (Technical): One
senior Technical Officer holds the post with the responsibility to
monitor and administer the works of IMVs and Jr. IMVs of the
department.
v.) Joint Commissioner Transport (Tax): One Class I officer
from OAS cadre discharges this duty by monitoring, reviewing and
auditing the tax revenue collection of all RTOs and check gates.
B. Regional Transport Office (RTO): There are a few dozen
RTOs distributed geographically in the state, keeping the public
convenience in mind and vehicle population within the region. The
staffing pattern of each RTO includes one Regional Transport Officer
(RTO), Inspector of Motor Vehicle IMV, Addl RTO (Enforcement),
Addl RTO (General), Asst RTO, Traffic Inspectors, Traffic SubInspectors, Constables (Enforcement) and Ministerial Staff. RTO is in
overall charge of transport administration in the region. They act as the
key personnel in field offices to enforce the Motor Vehicle Act and
Rules.
C. Border Check Gates:- There are border check gates in most
of the States under the administrative control of motor vehicles
department, of which a few are major check gates catering almost
three-fourth of the total traffic. These check gates mostly operate
jointly with the Commercial Tax Department. Each check gate is
controlled by one ARTO and Junior IMVs. They watch on the
movement of interstate vehicles.
D. Deputy Commissioner of Transport:- In some of the
States, there are Range offices headed by Deputy Commissioner,
Transport. They monitor & supervise the functions of RTOs under
their jurisdiction. They review the work performances of the RTOs at
regular time intervals and report to the STA head quarters.
Similar structure of administrative organization exists in all the
States. A sample of organizational structure of some of the States is
given in Exhibit 8.1 to 8.3.

155

Procedures of Road User Tax

Importance of efficient operations of tax cannot be over
emphasised. Operations are important from two significant aspects.
First, higher tax yields are directly a result of the efficient operations of
the tax. It, therefore, increases income elasticity of the tax. And,
secondly, as a converse corollary, inefficient operations of tax causes
extreme inconvenience to tax paying dealers who come into direct
contact with the tax department. Criticism of the tax, therefore, stems
largely from the deficiencies in tax operations.
Vehicle Registration
Vehicle registration is compulsory to drive motor vehicle. No
owner of a vehicle can use or allow or permit to any one else to use the
unregistered vehicle. Vehicle is registered with Regional Transport
Officer (RTO). There are three types of registrations: temporary
registration, registration of New Vehicle; and registration of vehicle
arrived from outstate or assignment of new registration mark (R.M.A).
Temporary Registration: To take vehicle from the dealer's
premises, it needs a temporary registration. In case of non-transport
vehicles, to take the vehicle to the place of registration from the
dealer's premises it needs to be registered temporarily. In case of
transport vehicle one needs some time to construct the body of vehicle
over the chassis hence it needs a temporary registration. Temporary
registration is valid for 7 days initially and can be extended up to 30
days incase of non transport vehicles. An application for temporary
registration is made in the prescribed form.
Registration of New Vehicle: To apply for the permanent
registration of new vehicle, it should be produced to the RTO for
inspection. The vehicle is inspected by an inspector who confirms to
the provision of Act and rules and then the vehicle tax is paid along
with Form -20, sale certificate in form 21 (to be given by dealer),
roadworthiness certificate in form 22, and 22-A from the manufacturer.
In addition, the following certificates are also required: roadworthiness
certificate in form 22-A part II from the body builder for transport
vehicles; transport commissioner's approval; purchase invoice (for
vehicles attracting life time tax); temporary registration if any; valid
insurance certificate; address proof; entry tax payment proof if any
vehicle, body or tanker is purchased from outside the state; octroi
receipt if registering in municipal limits; PAN number or Form-60 in
two copies (expect 2 wheelers ); manufacturers certificate for invalid
carriage; customs clearance certificate in case of imported vehicles
along with license and bond if any.

156

Bill of entry is required for imported vehicles. In the case of a

trailer, it is also important to produce design approval from transport
commissioner. In the case of a trailer 7/12 abstract or tahasildar
certificate in the case of agricultural tractor & trailer is required.
Vehicle from Outstate for Assignment of New Registration
Mark (R.M.A)
If the vehicle is registered in one state and is kept or used in
other state for the period of more than a year then the vehicle needs to
be registered in the later state for a new registration number to be
assigned. For this the NOC from original registering authority and
consent of financier is needed to be furnished. In addition, apart from
payment of the requisite fee, the following documents have to be
submitted:
Form - 20,26,27.
Form 29,30 - incase of transfer of ownership.
Form 33 - incase of change of address only.
NOC in form 28 with chassis print affixed on it from
the original registering authority along with consent from
financier.
Form FT, AT.
Form TCA, TCR - incase of transport vehicles only.
Proof of payment of entry tax in case vehicle has
arrived within 30 months of date of it's first registration.
An affidavit from the owner of the vehicle stating that
vehicle in concerned in not involved in any accident, theft or
crime.
All valid documents of the vehicle.
With all above forms and certificates the vehicle is to be
produced for inspection at the R.T.O office.
Licenses:
To drive a motor vehicle in any public place a valid driving
license is necessary. That is, a person must posses a license authorizing
him/her to drive vehicle of that particular category. There are different
types of licenses issued by the RTO offices.
There is a temporary license that is valid up to 6 months from
the date of issue. It is basically issued to learn driving of Motor
Vehicles. Permanent driving license is issued to those who become

157

eligible for it after thirty days (to apply within 180 days) from the date
of issue of the learner license. Person suppose to get permanent driving
license should be conversant about the vehicle systems, driving, traffic
rules & regulations. In case of loss, theft, or on mutilation, a duplicate
License is issued. The documents to be produced are FIR of the lost
license, challan clearance report from RTA Office (in case of
Commercial licence renewal) and an application in Form LLD. The
particulars are verified by the authority from the records. The duplicate
license will have the valid period same as the previous license. The
motor licensing authority also issues international driving license. The
validity of this license is for one year. Person visiting the country is
required to collect the license from there within one year period. Apart
from address proof and birth certificate, one has to produce a valid
passport and valid visa while applying. Two-wheeler license is issued
by the Regional Transport Authority (RTO) to permit driving of only
two-wheeler vehicles like bike, scooter and moped. Light motor
vehicle license is issued to drive light vehicles like auto rickshaws,
motor car, jeep, taxi, three-wheeler delivery vans, etc. Heavy motor
vehicle (HMV) License is issued to drive heavy vehicles like trucks,
buses, tourist coaches, cranes, goods carriages, etc. A person with
HMV license can drive light vehicles but light motor vehicle license do
not permit to drive heavy vehicles.
Documentation Formalities for Different Operations
A review of different operations and procedures of the motor
vehicles department indicates that for each and every activity there are
different documents (forms) are prescribed to be filled in. Many of the
forms call for the information that is useful for the department to take
necessary action for the activity concerned. However, it is noticed that
in all there are 58 forms prescribed in the Central Motor Vehicle Rules
1989. A study of the details of each Form indicates that in all, 186
different kinds of basic data are collected by the various Transport
Departments of States/UTs through these forms. The description of the
various formats and important data/information collected through
these forms are given at Annexure A.8.1.
A review of formats of the 58 forms, given in a matrix in
Annexure A.8.2, reveals that the forms are not user-friendly. Much of
the information sought in these forms is repetitive in nature and
redundant. For example, every application for issue of a learning
license shall be accompanied by a medical certificate in Form No. l.
An application for a medical certificate (form No. l) contains
applicant's declaration pertaining to his/her physical fitness. The

158

information sought under "declaration" in form No.1 is repeated in

form No. l-A under item No. 3. Moreover, once physical fitness of the
applicant is certified by the competent authority (medical officer), the
applicant's declaration in this regard does not serve any purpose. The
applicant's address is classified into permanent address, temporary
address, official address, etc. Sub-classification of applicant's address
leads to unnecessary complications and does not serve any specific
purpose. Therefore, it is suggested that it should be enough to seek
applicant's residential address only.
Both the date of birth and age of the applicant are to be
furnished in many of the forms. It should be enough to furnish the date
of birth alone as it will help calculate the age of the applicant. Form
No.2, form No.4, form No.6 and form No.8 contain the details of
vehicle classification as motor cycle without gear, motor cycle with
gear, invalid carriage, light motor vehicle, heavy motor vehicle,
medium goods vehicle, medium passenger motor vehicle, heavy goods
vehicle and heavy passenger motor vehicle with the intention that the
applicant should tick mark one of the vehicle categories. It is
suggested that, instead, the applicant may be asked to fill in the
suitable vehicle category in the given vacant space. However, to have
justice to the operational requirements and convenience of taxpayers,
it is suggested a Committee of Experts be appointed to examine all
these aspects minutely.
Also, a detailed scrutiny of the operations at the office of the
RTO suggests that for most of the activities the person has to move
around to two or three windows causing waste of time and making him
stand in the queue again and again. In most cases to save time people
are forced to use middle man for getting things done at a cost. It is,
therefore, suggested that a single window system be introduced for
each of the operations.
Transfer of Vehicle
One of the activities of the RTO is to ensure smooth transfer of
vehicles if a person moves from one State to another State. However,
it is observed that the person going in for transfer of vehicle is put to
great inconvenience, especially in relation to obtaining no objection
certificate from the origin state. In general, the department does not
respond to letters. The NOC could be obtained only by personal visit,
which very time consuming and costly affair. The department must
evolve methods where minimum inconvenience is caused to the
customer coming especially in the case vehicle transfers from one
State to another and non-refund of one-time tax paid etc.

159

Introducing Suitable MIS

The States should introduce suitable computer technology to
ensure transparent, citizen friendly services. As explained in the next
chapter, it is high time that a requisite management information system
is introduced in the department to have transparency, responsiveness
and accountability, as per the details given in chapter 9 supra.
The above measures would pave way for the better governance
of the system of road transport taxation.
To conclude, the existing system of taxation of road transport
performs an important function of raising resources for the centre and
the states. However, the procedures need further improvements to
remove delays. Efforts must be made to curtail the role of
intermediaries and curb the corruption in the system. The following
reforms could be implemented:
The responsibility of registration of new
vehicles must be given to the dealers selling vehicles.
A ready reckoner for determining tax liability
should be printed and distributed by the department for the
use of taxpayers. This would make the tax system
transparent.
The use of intermediaries must be discontinued.
The responsibility for doing so be given to the RTO
concerned.
A single window system for providing all
services must be introduced.
Procedures for national permits should be
simplified.
The above reforms in management of transport taxes would
streamline the procedures and do away with most of the irritants in the
system.

160

Exhibit 8.1 Organization for Administration of MVT: Illustration of Haryana

Financial Commissioner and Principal Secretary
Transport Department

Transport Commissioner

Addl.Transport
Comm.(A)

Addl.
Sr Mechanical
Transport
Engineer Govt.
Comm.(C) Central workshop

Dy.
Transport
controller

Works manager

District
Attorney

Dy. District
Attorney

Chief
Accounts

Dy.
Transport
Controller

Flying
Squard
Officer,
ISBT, Delhi

GM,Driv
er
Training
Institute,
Murthul

Dy.Transport
Controller,
Central
workshop,
Karnal

Dy Transport
Controller
,Central
workshop
,Hissar

General Manager
(20)
Driver
training
School (5)

Traffic
Manager

Store
Purchase
officer

Accounts officer
Assistant
District
Attorney

Superintendent

161

Exhibit 8.2 Organization Chart of Transport Department of Orissa

162

Exhibit 8.3 Organization Chart of Transport Department of UP

Principal Secretary, Transport Department,
Government of Uttar Pradesh
Transport Commissioner's Office
(Transport Commissioner)
Zones (6)
Dy. Transport Commissioners (DTC)
Regions (19)
Regional Transport Officer (RTO)
Sub-Regions (70)
Asst. Regional Transport Officers (ARTO)

163

AnnexureA.8.1

DescriptionofformsprescribedunderMoterVehicleActandthe
importantdata/informationcollectedthroughthem

Form1
Applicationcumdeclaration

tothePhysicalFitness

Form2
Applicationforthegrantorrenewal
ofLearnersLicense

Form3
LearnersLicence

Form4
FormofapplicationforLicence
todriveaMotorVehicle

Form5
DrivingCertificateissuedby
DrivingSchoolorestablishing

NameoftheApplicant.
Son/Wife/daughterof.........
PermanentAddress..
TemporaryAddress.
OfficeAddress(Ifany)
DateofBirth..
AgeonthedateofApplication..
Medicallyfit/notfitholda
Drivinglicence
TypeMotorVehicle.
EducationQualification
Detailsofthepreviouslyholding
DrivingLicence..
Writtenconsentofparent/guardian
(incaseofapplicantbeingaminor).
PaymentofFeefortheLicence
Passed/Failedthetest...
Licencenumberwithdate..
DescriptionofMotorVehicle
Whetherexemptedformthemedicaltest
underrule6oftheMotorVehicles
Rules,1989.
WhetherExemptedformpreliminarytest
UnderRules11(2)ofthecentralMotor
VehiclesRules,1989
Passed/Failedthetest....
CourseofTrainingofclassofVehicle
Periodofcoursetraining.
Senseofresponsibility
164


Form6.
FormofDrivingLicence

Form7.
FormofDrivingLicence

(LaminatedandcardType)

Form8
Applicationfortheadditionofnew
classofvehicletoadrivinglicence

Form9
FormofApplicationfortherenewal
ofDrivingLicence

Form10
StateRegisterofDrivingLicence

Form11
TermoflicencefortheEstablishment
ofMotorDrivingSchool

Form12
FormofapplicationforaLicenceto
engageinthebusinessofimparting
Instructionsindrivingof

DrivingLicenceNo
DateofIssue..
DescriptionofMotorVehicle.
ValidityofMororVehicle.
ValidityperiodoftheLicence..
BadgeNumber..
DrivingLicenceNo
DateofIssue..

DescriptionofMotorVehicletobeadded.
Passed/Failedthetest..

DrivingLicenceNo
DateofIssue..
Licenceisrenewedwithin30days/not
Renewedwithreasons..
DrivingLicenceNo.anddateof
initialissue
LicensingAuthoritywhichissuedthe
Licence
Nameandaddressoftheofficerwhohas
takendrivingtest.
Dateofpassingthetestbytheholder
oftheLicence.
Dateofexpiryofthelicenceandfurther
renewal
DrivingLicenceNo
DescriptionofMotorVehicle..
TheperiodofValidityoflicence..
Placewheretheapplicantdesiresto
Starthisbusiness
Requiredfacilitiesavailable/not
165

MotorVehicles

Form13
Formofapplicationforrenewing
alicencetoengageinthebusinessof
impartinginstructionsinthedrivingof
MotorVehicles

Form14
Registershowingtheenrolment
oftrainees(s)inthedrivingschool
establishments

Form15
Registershowingthedrivinghours
spentbyTrainee

available
Qualificationofstaffengagedforimparting
Instructions
Whethermodelofenginetobeusedfor
Trainingpurposesismadeornot.
Detailsoftheregistrationmarksofthevehicles
usedforimpartingdriving
Instructions..

*******

Enrolmentnumber..
Classofvehicleforwhichtraining
imparted.
Datedofenrolment..
Learnerslicencenumberanddateof
itsexpiry
Dateofcompletionofthecourse.
Dateofpassingthetestofcompetenceto
Drive.
Drivinglicencenumberanddateofissue.

Hoursspentinactualdriving

166

Form 16
Form of application for grant
or renewal of trade certificate

Form 17
Form of Trade Certificate

Form 18
Intimation of loss or destruction of
as trade certificate and application
for duplicate certificate
Form 19
Register to be maintained by the
holder of Trade Certificate

Form 20
Application for the registration
of Motor Vehicle

Form 21
Sale Certificate

Whether the applicant is a manufacturer or dealer in Motor Vehicles, approved

repairer of vehicles, engaged in building bodies to vehicles, engaged in the
business of hire purchased/lease/hypothecation of vehicles
Numbers if certificates required
Class of Motor Vehicles(s) in respect of which each (Certificate) is
required..
Serial number of certificate...
Full name and address of certificate
Holder
Trade number of assigned in respected of the
Certificate.
Class of Motor Vehicle.
Date of expiry of certificate...
Trade certificate No
Validity of the certificate

Date. Trade certificate No...

The registration No. of Vehicle
Description of Motor Vehicle
Drivers name.
Licence No
Hours of leaving the premises by the
Vehicle.
Mileage covered...
Name of the person to be registered as registered owner son /
wife/daughter..
Age of the person to be registered as registered
Owner.
Permanent address of the person to be registered as registered
owner...
(Evidence to be produced)
Temporary address of the person to be registered as registered
owner...
Name and address of dealer or manufacturer
From whom the vehicle was
purchased.
Whether the vehicle is held under an agreement of hire purchase/ Leased
Hypothecation
Assigned registration No

Brand name of the vehicle..

Name if the buyer.
Son/wife/daughter Address (permanent &
Temp.)
Date of delivery..

167

Agreement of ..
Purchase/ Lease/hypothecation..
Form 22
Initial certificate of compliance
with pollution standards, safety
standards of components and road
worthiness

Form 23
Certification of registration

Form 24
Register of Motor Vehicle

Form 25
Form of application for renewal of
certificate of Registration of a
Motor Vehicle other than a
Transport Vehicle
Form 26
Application for the issue of
duplicate certificate of Registration
Form 27
Application for assignment of new
Registration mark to a Motor
Vehicle

Form 28
Application for grant of no

Brand name of the vehicle.

Chassis No. .
Engine No
Complies with the provisions of the MV Act
1988.

Registration No
Description of vehicle..
Purchase form the dealer name&
Address.
Name of the registered owner.
Son/Wife/daughter of..
Address (permanent & Temp.)

Description of registration of motor vehicle.

Full name of owner on registration..
Son/Wife/daughter of..
Full address
Purchase of agreement like hire purchase
Lease hypothecation.............
Registration No
Date of Registration..
Dealer name and address.....
Previously registration under Hire Purchase/ Leased
Hypothecation.
Financiers name and address

Registration No
Date of Issue.
Date of expiry.
Registering authority

Registration mark of the certificate.

Complaint no. and date with police..
Date and duplicate registration no...
Name
Son/Wife/daughter of..
Motor Vehicle no..
Chassis No..Engine No.
Type of Vehicle
Registered State
Date of valid registration
Assigned new registration mark

Name and address, son/wife/daughter

168

objection certificate

Form 29
Notice of transfer of ownership of a
Motor Vehicle

Form 30
Application for intimation and
transfer of ownership a Motor
Vehicle

Form 31
Application for transfer of
ownership in the name of the
person succeeding the possession
of the vehicle

of ..
Registration number of the Vehicle ...
Class of Vehicle
Registering authority which originally registered the
vehicle..
Engine Number
Chassis number
Period of stay in the state..
Period upto which motor vehicle tax has been
paid..
Pending action under section 53,54 or 55 of the MVA
1988..
Prohibited goods to be transported by the
vehicle
Name/ address of the financier under an agreement or . HP/
Lease/Hypothecation..
No objection certificate granted/not granted
granted..

Vehicle No.......
Make ..
Chassis No
Engine No
Name of the transferee.
Under the agreement of hire purchase/lease
hypothecation.
Date of transfer effected from..
Name of the transferor
Son/Wife/daughter of..
Full Address.
Date of selling of the vehicle
Name of transferee.
Son/Wife/daughter of..
Address of transferee
Full name address of the financier
Date of registration of transfer...
Vehicle registration No
Make and model
Chassis No.
Type of Vehicle..
Name of the deceased registered
owner...
Name and age of the person succeeding to the possession of the
vehicle.
Son/Wife/daughter of..
Full Postal address..
Relationship with the deceased .
Registered owner.
Date of registration of transfer of
Ownership

Form 32

169

Application for transfer of

ownership in case of Motor vehicle
purchased or acquired in public
auction

Form 33
Intimation of change of address for
recording in the certificate of
Registration and office Records

Form 34
Application for making an entry of
an agreement of hirepurchase/lease/ hypothecation
subsequent to registration

Form 35
Notice of termination of an
agreement of hire purchase/
lease/hypothecation
Form 36
Application for issue of a fresh
certificate of Registration in the
name of the Financier

Form 37
Notice of the Registered Owner of
the Motor Vehicle to surrender the
certificate of registration for
Cancellation and issue of fresh
Registration certificate in the name
of the Financier
Form 38
Certificate of Fitness ( in the case
of Transport vehicle only)
Form 39
Form of letter of Authority issued
to an authorized testing station

Name
Son/Wife/daughter of..
Fulle address..
Vehicle No.
Make..
Model
Type of Vehicle...
Name of the auctioneer.

Name
Son/Wife/daughter of..
Full address..
Date of change of address
Present address.
Name & Full address of financier
The Motor Vehicle No.
Registration No.
Agreement of hire purchase/ lease hypothecation
.......
Name and full address of the
financier..

Vehicle No..
Date of cancellation of the entry of an
agreement..

Name of the Financier

Motor Vehicle No
Make...
Model
Defaulted registered owners name...
Full address of the defaulter...
Agreement of hire purchase/ license /hypothecation
..
Name of registered owner
Name of the Financier.
Registration No
Agreement of hire purchase/lease/hypothecation

Vehicle No..
Expiry date of certificate..
Date of renewal of fitness certificate.
Letter of Authority No
Date..
Name of the Authority Holder
Address of the Authority holder
Address of the Testing station premises .

170

The validity period of authority.

The period of renewal of authority..
Form 40
Application for grant or renewal of
Letter of Authority

Name of the Applicant..

Son/wife/daughter of .
Address..
Qualification of the applicant...
Experience in automobile workshop..
Whether connected direct of
Indirectly in transport business.
Machinery & equipment.
Staff engaged in different cadres
(i) Manager
(ii) Mechanic...
(iii) Helpers...
(iv) Other administrative staff...
Particulars of a person required under clause(a) of sub- rule(3) of rule 63 of
Central Motor Vehicles, Rules, 1989
(a) Name.
(b) Age
(c) Qualification automobile engineering
(d) Actual experience in automobile
workshop
(e) Name of firm with full address...
(f) Driving experience of various types of transport vehicles
(i)
Driving Licence No
(ii)
Issued by .
(iii)
Date of issue...
(iv)
Type of Vehicle
(v)
Period of Validity of driving licence, if
any
(vi)
Endorsement on driving licence, if
any
Proof of land owned by or hired by the
applicant
Whether garage is equipped with following facilities:
(i)
Water supply
(ii)
Electricity
(iii)
Toilet
(iv)
Rest room
Source of finance..
Number of existing letter of authority
Date of issue
Period of validity..

Form 41
State Register of Motor Vehicles

Registration No
Previous registration No
Whether the motor vehicle is
(a) New Vehicle
(b) Imported Vehicle
(C) Ex- army Vehicle
Makers name.
Year of manufacture..
Engine No

171

Chassis No
No. of Cylinders
Cubic capacity/horse power
Type of fuel used
Class of Motor vehicle..
Name and full address of the registered owner
Seating capacity..
Gross weight of the vehicle..
Form 42
Form of application of r the
Registration of Motor vehicle by or
on behalf of a Diplomatic/Consular
Officer

Full name, designation and address of the diplomatic officer/consular

officer..
Age of the person to be registered as registered
owner.
Name and address of the person from whom the vehicle was purchased/name of
the port through which the vehicle was imported/ name of the person or
company form. Whose bonded stocks the vehicle was purchased and the name of
the port
Country from which imported.
Class of vehicle.
Type of body..
Makers name.
Year of manufacture
Number of cylinder
Horse power
Makers classification or, if not know,
Wheel base
Chassis number
Engine number.
Seating capacity (including driver)..
Unladen weight.
Particulars of previous registration and registered number (if
any)
* Number description and size of tyre.
a. Front axle
b. Rear axle
c. Any other axle
*
*

Maximum laden weight kgs.

Maximum axle weight (in the case of heavy motor vehicle
only).
a. front axle kgs..
b. rear axle kgs
c. any other axle kgs

172

Form 43

Registration No.

Certificate of registration of a
motor vehicle belonging to a
diplomatic or consular officer

Description No. .

* Full name and address of the diplomatic officer/consular

officer....
*

Class of vehicle..

Makers name.

Type of body...

Year of manufacture

Number of cylinders....

Engine numbers

Horse power.

Makers classification or wheel base

Seating capacity (including driver)...

Unladen weight

Registered laden weight..

Size of front axle..

Size of rear axle

Size of any other axle

Registered axle weight (in the case of heavy motor vehicle

only)..
(a) front kgs
(b) rear kgs..
(c) any other axle kgs

Form 44
Intimation of change of state of
residence and application for
assignment of fresh registration

Name and designation.

Type of motor vehicle..

173

mark by or on behalf of a
diplomatic or consular officer

Motor vehicle No.

Place of registration

Period of stay in the state

Name of the applicant .

Form 45
Application for grant of permit in
respect of tourist vehicle

Status of the applicant (whether individual, company, firm

etc.)................................................

Name of father or husband (in the case of individual) and in the case of firm
or company the particulars of managing partner or managing director as the
case may be.

Full address
a.

whether applicant himself intends to drive the vehicle?

b.

If so, whether applicant

i)

holds heavy passenger motor vehicle driving licence

ii) the number, date and validity period of driving licence

iii) name and address of the licensing authority
* Registration certificate along with the date of first registration, insurance
certificate No. ..
*

Details of other permits if any held in respect of particular

vehicle.

Details of total number of tourist permit held by the

vehicle.

Form 46

Name of the applicant(s) in full.

Form of application for grant of

authorization for Tourist Permit or
National Permit

Son/wife/daughter of.

Address..

Registration mark and year of manufacture and date of registration of the

motor vehicle

Engine number of the motor vehicle.

Chassis number of the motor vehicle

174

Permit number, the authority which has issued the permit and date of issue
and date of expiry of the permit..

Unladen weight of the motor vehicle..

Gross vehicle weight of the motor vehicle..

Pay load of the motor vehicle (seating capacity in the case of tourist
vehicle)

Period for which the authorization is sought from.

Form 47
Authorisation for Tourist Permit or *
National Permit
*

Authorisation No. .
Date of authorization..

Authorised throughout India/state(s)

Name in full and complete address of holder of the permit

Registration make of the motor vehicle and mark..

Year of manufacture

Engine number of the motor vehicle

Chassis number of the motor vehicle..

Permit number of the motor vehicle

Name of the permit issuing authority..

Date of expiry of the permit

Gross vehicle weight of the motor vehicle..

Unladen weight of the motor vehicle..

Seating capacity in the case of tourist vehicle.

Period of validity of the authorization form

Form 48
Application for
National Permit

the

grant

of *

Name of the applicant(s) in full..

Status of the applicant, whether individual, company or partnership firm

etc

Name of father or husband (in the case of individual) and in the case of

175

company or firm the particulars of managing partner or managing director as

the case may be.
*
a.

Full address
whether applicant himself intends to drive the vehicle..

b.

if so, whether applicant holds heavy goods vehicle driving licence

i)

The number, date and validity period of the driving

licence.

ii) Name and address of the licensing authority

Form 49
Form 50
Bill of lading

Form 51
Certificate of Insurance

Registration certificate alongwith the date of first registration, insurance

certificate..

Details of any other permits if held in respect of a particular

vehicle.

Details of number of National Permits held by the

applicant

Type of vehicle, whether two-axle truck, or articulated vehicle or multi-axle

or tractor-trailer combination.

Make of Motor vehicle.

Bill No.
Date ..
Name of address of the National Permit
Holder...
Registration number of the Motor Vehicle with
date.
Name of the consignor
Name of the Consignee.
Point of origin.
Point of destination.
Number of Articles .
Type of goods..
Weight in Kg
Freight charges to pay
Total charges

Certificate number
Policy No
Registration mark of the vehicle insured...
Description of the vehicle
Make & Year of manufacture.
Engine No..
Chassis No..
Carrying capacity..

176

Name and addresses of the insured...

Effective date and time of commencement of
insurance
Date of expiry of insurance.
Persons or class of persons entitled of drive
Vehicle is stage carriage/contract carriage /private service
vehicle.
Form 52
Cover Note

Form 53
Certificate in respect of exemption
of Motor Vehicle form Insurance

Form 54
Accident Information Report

Registration mark & number of description of the vehicle

insured.
Name and address of the insured.
Effective date & time of commencement of
insurance..
Date of expiry of insurance.
Persons or classes of persons entitled to drive.
The expiry date of the cover note
Registration number of vehicle
Make of the Vehicle.
Class of the vehicle...
Colour of Body.
The property belongs to the government/local authority / state transport
undertakings ..
The validity period of the certificate.
Name of the Police station..
CR.No./ Traffic accident report
Date, time and place of the accident..
Name of full address of the injured/deceased
Name of the hospital to which he/she was
removed..
Registration number of vehicle and type of the
vehicle..
Driving licence particulars:
(a) Name and address of the driver...
(b) Driving licence number and date of expiry

(c) Address of issuing authority..

(d) Badge No. in case of public service.
Name and address of the owner of the vehicle at the time of the
accident..
Name and address of the insurance company with whom the vehicle was
insured and the particulars of the divisional officer of the said insurance
Company
Number of insurance policy/insurance certificate and the date of validity of
the insurance policy/ insurance
Certificate
Registration particulars of the vehicle (class of Vehicle)
(a) Registration No.
(b) Engine No.
(c) Chassis No
Route permit particulars.
Action taken, if any and the result there
of

177

Form 55
Application for the approval of a
Foreign Insurer
Form 56
Notice to cease to act as guarantor
Form 57
Certificate for Foreign Insurance

Form 58
Endorsement on certificate of
foreign insurance

Name of the foreign insurer

Domiciled at.

Address of foreign insurer..

Date of ceasing as guarantor
Certificate No.
Policy No.
Name and address of guarantor...
Registration mark and number of the motor
vehicle.
Name and address of the visitor..
Date of commencement of policy
Date of expiry of the policy.
Person or class of person entitled to drive the vehicle in
India

Expiry date of validity period of

endorsement
The validity period of renewal of
endorsement..

Source:AsianInstituteofTransportDevelopment(1999),TruckingOperationsinIndia,NewDelhi.

178

Annexure A.8.2
Commonality of data in Various Forms under Motor Vehicles Act
S.
No.

Particulars

1
1

2
Name of the
Applicant

Son//Wife
Daughter of

Permanent Address

Temporary dress

Official Address if

Form Numbers
Grant
of
Licence
in
respect
of
Tourist
Vehicle
10
F45,
F46,
F48

Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

3
F1,
F1A,
F2, F3,
F4, F5,
F6, F7,
F8, F9,
F10
F1, F2,
F3, F4,
F5, F7,
F9, F10
F1, F2,
F3, F4,
F5, F6,
F7, F9,
F10
F1, F2,
F3, F4,
F5, F6,
F7, F9,
F10
F1, F2,

4
F14, F15,
F16, F18

5
F20, F27,
F28, F41

6
F29, F30,
F33

8
F40

9
F42, F44

F29, F30,
F32 F33

F40

F42,F43

F14, F16,
F18
F14, F16,
F17, F18

F20, F21,
F23, F24,
F26, F27,
F28
F20, F21,
F23, F24,
F25, F26,
F28, F41

F45,
F46,
F48

F29, F30,
F32, F33

F40

F42, F43

F45,
F46,
F48

F14, F16,
F17, F18

F20, F21,
F23, F24,
F26, F28

F30, F32

F40

F14, F16,

F20, F21,

F30, F32,

F40

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F42

179

S.
No.

Particulars

2
any

Date of Birth

Age on date of
application
Identification
marks
(i)
ii

9
10

Any medical
Deficiency
Blood Group

11

RH Factor

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

3
F3, F4,
F5, F6,
F7, F9,
F10
F1, F2,
F3, F4,
F6, F10
F1

4
F17, F18

5
F23, F24,
F25, F28

6
F33

F40

F42

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F14

F20

F1,
F1A,
F2, F3,
F4
F1,
F1A
F1A,
F2, F3,
F4, F6,
F7, F8,
F9
F1A,
F2, F3,
F4, F5,

180

S.
No.

Particulars

12

Medical Fitness

13

Name and
Designation of the
Medical
Officer/Practitioner
Registration
number of Medical
Officer
Description of
Motor Vehicle (s)
(a) Motor Cycle
without gear
(b) Motor cycle
with gear
(c) Invalid
carriage
(d) Light Motor
Vehicle
(e) Medium good

14

15

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

3
F8, F9
F1A,
F2, F3,
F4, F5,
F7, F8,
F9
F1-A

F11, F14,
F15, F16,
F17, F19

F20

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F1-A

F2, F3,
F4, F6,
F7, F8,
F9, F10

181

S.
No.

Particulars

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

vehicle
(f) Medium
passenger motor
vehicle
(g) Heavy motor
vehicle
(h) Heavy
Passenger Motor
Vehicle
(i) Road Roller
16
17

18

19

20

Educational
Qualifications
Effective Date of
holding driving
licence
Written consent of
parent/guardian (in
case of applicant
being minor)
Mane and Address
of Driving School
with validity period
Payment of the Fee

F2, F4,
F6, F10
F2

F40

F2, F4

F2, F4,
F5

F11, F12,
F13, F15,

F2, F4,

F12, F16,

F20, F25

F34

F35, F36

F46

182

S.
No.

Particulars

21

Exempted from the

Medical Test under
Rule 6 of Central
Motor Vehicle
Rules,1989
Exempted from the
preliminary test
under Rule 11 (2)
of Central Motor
Vehicles
Rules,1989
Name and Address
of the
Parent/Guardian
Relationship of
guardian with
applicant
Passed the test with
date
Learner's Licence
No.
Passed the
preliminary test

22

23

24

25
26
27

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

3
F8, F9
F2, F3,
F4

4
F17, F18

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F2, F3,
F4

F2

F2

F2, F4,
F8, F9
F3, F4,
F8
F3, F4

F14
F14

183

S.
No.

1
28

29

30
31

32

33
34
35

36

37

Particulars

2
The validity period
of Learner's
Licence
Previously held
driving lincence
No. with date
Driving Certificate
No.
Full name and
designation of
testing authority
Date and enrolled
No. of driving
school
Course of training
of class of vehicle
Period of training
Driving Licence
No. with date
Validity period of
Licence to drive
motor vehicle
Badge No.

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

3
F3

4
F14

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F4, F7

F4

F48

F4, F6,
F8, F10
F5

F14, F15

F5
F5
F6, F7,
F8, F9,
F10
F6, F7,
F9, F10
F6, F7,

F14
F14

F40

F48

F54

F40

F45,
F48

F54

F54

184

S.
No.

1
38

39

40

41

42

43

Particulars

2
Licensing authority
by which the
Licence was issued
Licensing authority
by which the
Licence was last
renewed
Name of the school
and extent of
facilities available
for training
Qualification of
staff engaged for
imparting
instructions
Make and model of
engine to be used
for training
purposes
Details of the
registration marks
of the vehicle used
for imparting
driving instructions

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

3
F9, F10

4
F14

8
F40

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10
F45,
F48

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F54

F12

F12

F12

F12

185

S.
No.

1
44

45

46

47
48

Particulars

2
Hours spent in
actual training
school
Whether
the
applicant
is
a
manufacturer
of
dealer in motor
vehicle, approved
repairer
of
vehicles, engaged
in building bodies
of
vehicles,
engaged
in
business of higher
purchase,
less,
Hypothecation
Number of
certificates
required
Serial number of
trade certificate
Trade number
assigned in respect
of the certificate

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

4
F15

F16

F23

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F16

F17
F17, F18,
F19

186

S.
No.

1
49
50

51

52

53

Particulars

2
Date of expiry of
the trade certificate
Name and address
of the dealer or
manufacturer from
whom the vehicle
was purchased
Vehicle is ex-army
vehicle, imported
vehicle, locally
manufactured
vehicle
The Motor Vehicle
is
(a) New vehicle
(b) Ex-army
vehicle
(c) Imported
vehicle
Type of body

54
Type of vehicle

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

4
F17, F18

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F51

F51

F51

F51

F20

F20, F24,
F41

F20, F23,
F24, F25,
F41

F20, F24,
F25
F20, F21,
F22, F23,
F24, F27,

F30

F42, F43
F29, F30,
F32

F36

F40

F42, F43

F45,
F48

F54

187

S.
No.

Particulars

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

5
F28
F20, F21,
F23, F24,
F25, F41
F20, F21,
F23, F24,
F25, F41
F20, F21,
F23, F24,
F20, F21,
F23, F24,
F20, F21,
F23, F24,
F25, F41

F32

F36

F20, F21,
F22, F23,
F24, F25,
F27, F28,
F41
F20, F21,
F22, F23,
F24, F25,

F29, F30,

55
Maker's name
56

57
58

Month and year of

manufacturer
Number of
cylinders
Horse power

59
Cubic capacity
60

Wheel base

61
Chassis number

62
Engine Number

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F53

F53

F53

F53

F46,
F47

F51

F51

F54

F46,
F47

F51

F51

F54

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10
F45,
F48

F42, F43
F42

F20, F23,
F24
F42

F29

F42, F43

188

S.
No.

Particulars

63
Seating
capacity(including
driver)
64
Fuel used in engine
65
Unladen weight
66

67

68

69

Previously held
registration
number of the
vehicle
Colour or colour s
of body wings and
front end
Number
description and size
of tires
Fron axle

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

5
F27, F28,
F41
F20, F21,
F22, F23,
F24, F25,
F27, F28,
F41
F20, F21,
F23, F24,
F25, F41
F20, F21,
F23, F24,
F25, F41
F20, F21

F29

F42, F43

F46,
F47

F42, F43

F46,
F47

F20, F21,
F24

F42, F43

F20, F21,
F24

F43

F20, F21,

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F51

F51

F54

F43

189

S.
No.

1
70
71

72

73
74
75
76
77
78
79

Particulars

2
Rear axle
Gross vehicle
weight
Maximum axle
weight
(a) Fran axle
(b) fear axle
Overall length
Overall height
Overall width
Overhang
Type of body of
semi trailer
Weight of semi
trailer
Number
description and size

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

5
F23F24
F20, F21,
F23, F24
F20, F21,
F23, F24,
F41
F20, F21,
F23, F24

F20, F23,
F24
F20, F23,
F24
F20, F23,
F24
F20, F23,
F24
F20, F24

F42, F43

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F46,
F47

F43

F20, F23,
F24
F20, F23,
F24

190

S.
No.

80

81

82

83

84
85
86

Particulars

2
of each axle of
trailer
Maximum axle
weight in respect of
each axle
Valid insurance
certificate number
with validity period
Motor vehicle is
subject to hire
purchase
lease/hypothecation
Motor vehicle
registration number
with validity period
Brand name of the
vehicle delivered
Date of delivery
Name of the buyer

87

Vehicle complies
with the provisions

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F20, F23,
F24
F20, F24

F54

F20, F23,
F25, F26,
F27, F28

F35, F36,
F37

F35, F36, F37

F20, F26,
F26, F28,
F41

F35, F37

F35, F37

F38

F42

F45,
F46,
F47,
F50

F54

F57

F21
F21
F21, F23,
F24, F25,
F26
F22

191

S.
No.

88

89
90

91
92
93
94

Particulars

2
of the Motor
Vehicle Act, 1988
with respect to
pollution standards
Vehicle complies
With the provisions
of the Motor
Vehicle Act, 1988
with respect to
body of the vehicle
Markers'
classification
Police complaint
registration number
for loss of
registration
certificate
Motor vehicle
number
Name of the state
of registration
Date and period of
registration
Previous

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

F29, F32

F35, F36

F38

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F22

F25
F26

F27
F27
F27

F46
F44

F29

F27, F41

192

S.
No.

95
96

97
98

99
100

101

102

Particulars

2
registration number
with validity period
New registration
mark
Registering
authority which
originally
registered the
vehicle
Period of stay in
the state
Period up to which
motor vehicle tax
has been aid
Pending tax details
Vehicle involved in
any theft cases with
details
Action pending
against section
53,54 Or 55 of
motor vehicle act
1988
Any case against

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F27
F28

F28
F28

F28
F28

F28

F28

193

S.
No.

103
104
105
106

Particulars

2
transporter
prohibited goods
of the purchaser
Address of the
purchaser
Effective date of
transfer
Full name of the
financer

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

F29, F30
F29, F30

F36, F37
F36, F37

F29, F30,
F31
F30, F31,
F33, F34

107

Address of the
financer

F30, F31,
F33, F34

108

Relationship
with the
deceased
registered
owner

F31

109

Date of
transfer
of
ownershi
p in case

F32

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F36

194

S.
No.

Particulars

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

of motor
vehicle
purchase
d or
squire in
public
auction
110

The new address

111

The period of
renewal of
fitness
certificate
in case of
transport
vehicle
F39, F40
Number of letter of
authority for testing
station with
date Name of
authority holder
Address of

112

113
114

F33
F38

F39, F40

F39
F39

195

S.
No.

1
115

116

117
118

119

120
121

Particulars

2
authority holder
Address of the
premises of the
testing station
Period of validity
of authority for
testing station
Renewed Period of
authority
Experience in
automobile
workshop
Directly/indirectly
in all in transport
business
Machine &
equipment
Staff engaged in
different cadres
(i) Manager
(ii) Mechanic
(iii) helper
(iv) other
administrative staff

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F39

F39, F40

F39
F40

F40

F40
F40

196

S.
No.

1
122

123

124

125

126
127

128

129

Particulars

2
Driving experience
of various type of
transport vehicles
Endorsement on
driving Licence, if
any
Proof of land
owned by or held
by the applicant
Whether garage is
equipped with
(i) water supply
(ii) electricity
(iii) toilet
(iv) rest room
Source of finance
Designation of
Diplomatic officer/
consular officer
Name and address
of the person from
whom the vehicle
was purchased
Country from

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

8
F40

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F40

F40

F40

F40
F42, F43, F44
F42

F42

197

S.
No.

1
130
131

132
133

134

135

Particulars

2
which imported
Year of
manufacture
Register number of
motor
vehicle
belonging
to
diplomatic or
consular officer
Registering place
of vehicle
Period of stay of
the vehicle in the
state
Status of the
applicant, whether
individual
company or
partnership
firm or cooperative
society etc,
If applicant holds
Heavy passenger
motor vehicle
Licence

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F42, F43
F43

F44
F44

F45,
F48

F45,
F48

198

S.
No.

1
136

137

138

139

140

141

142

Particulars

2
Details of other
permits, if any,
held in respect of
particular vehicle
Details of total
number of tourist
permits held by the
applicant
Registration mark
and year of
manufacture
Permit number, the
authority which has
issued the permit
and date of issue
and date of expiry
of the permit
Period for which
authorization is
sought for
List of states for
authorization
granted
Name and address

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10
F45

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F45,
F48

F45,
F48

F51, F52

F46,
F47
F46

F46

199

S.
No.

1
143

144
1456
146
147
148
149
150
151
152
153
154
155
156

Particulars

2
of permit holder
Name and address
of permit issuing
authority
Date of expiry of
the permit
Number of bill of
lading
Name of the
consignor
Name of the
consignee
Point of origin
Point of destination
Number of articles
Weight in Kg.
Freight charges
paid
Freight charges to
pay
Total charges
Truck number
Name and address
of the insured

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F47,
F50
F47
F47
F50
F50
F50
F50
F50
F50
F50
F50
F50
F50
F51, F52

200

S.
No.

1
157

158

159

160

161

162

Particulars

2
Persons or class of
persons entitled to
drive
Permit is for stage
carriage/ contract
carriage-private
service vehicle
Name of the
government to
which properly
belongs
Name of tile local
authority/stale
transport
undertaking
Exemption
certificate for
insurance by the
order number with
date
Validity period of
exemption
certificate for
Insurance

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11
F51, F52

12

13

F51, F52

F52

F52

F53

F53

201

S.
No.

1
163
164
165
166

167

168
169

170

Particulars

2
Name of the police
station
CR. No./traffic
accident report
Date, time and
place of accident
Name and full
address of the
injured/deceased
Name of the
hospital to which
he/she was
removed
Name and address
of the driver
Name and address
of the owner of the
vehicle at the time
of the accident
Name and address
of the insurance
company with
whom the vehicle
was insured and the

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12
F54

13

F55
F55
F55

F55

F54
F54

F54

202

S.
No.

171
172

173
174
175
176
177
178
179
180

Particulars

2
particulars of the
divisional office of
the said insurance
company
Route permit
particulars
Action taken, if
any, and the result
thereof
Name of the
foreign insurer
Domicile at
Expiry date of the
guarantor
Certificate number
of foreign insurers
Name and address
of guarantor
Name and address
of visitor
Date of
commencement of

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13

F54
F54

F55,
F56, F57
F55,
F56, F57
F56
F57
F57
F57
F57
F57

203

S.
No.

1
181

182

183

184

Particulars

2
the policy
Passenger or
classes of persons
entitled to drive in
India
Any limitations as
to use of Motor
Vehicle in India
Particulars of any
other vehicle(s)
which tile foreign
visitor is entitled to
drive in Indi3 and
any limitation as to
use of such vehicle
in India
The period of
validity of
endorsement

Form Numbers
Issue of
Driving
Licence

Licencing for
establishment
of Motor
Driving
school

Registration
of Motor
Vehicle

Transfer
of
ownership
of Motor
Vehicle

Agreement of
Hire
Purchase/Lease/
Hypothecation

Authorising
Testing
Stations

Registration of
Motor Vehicle on
behalf of
Diplomat/Consular
Officer

Grant
of
Licence
in
respect
of
Tourist
Vehicle
10

Certificate
of
insurance

Accident
information
report

Approval
of
foreign
insurance

11

12

13
F57

F57

F57

F58

Source: Asian Institute of Transport Development (1999), Trucking Operations in India, New Delhi.

204

9
MIS for Road User Taxes
In any country, the most important elements for proper
administration of road user taxes are efficient collection, collation and
analysis of the available information. The prime requisite is an adequate
information base for an evaluation of the existing tax policy and for the
simulation of the effects of proposed legislative changes. Thus, an
appropriate information base should cover all major aspects of tax
administration for its effective enforcement, reform and proper tax
legislation.
In addition, administration of road user taxes calls for an
information exchange system that verifies the credential of vehicles
registered in other states.
An information base of this dimension is possible with the help of
a suitable information technology, which could be used to provide
management with integrated, all encompassing information on the
working of the total organisation in order to facilitate the decision-making
process. The over all system of providing such comprehensive information
for the use of the management, known as management information system
(MIS), has interrelated sub-systems and a built-in capability to transfer
data between systems. The result is an output that provides management
with meaningful data for effectively controlling and administering
departmental policies.
Objectives of MIS
The MIS is designed to serve a wide variety of objectives:

205

i. It enables the evaluation of tax policy and the correct

appraisal of alternative policy measures with the help of
reliable statistical information.
ii. The quality and quantum of information collected is also of
invaluable help in driving insights into important facets of
the economy. For example, statistics of income tax
assessments will show the degree of inequality in the
distribution of income over time, the efficiency of tax
measures to promote desired objectives, their cost to the
community, the size of the parallel economy etc.
iii. These statistics should be one of the data sources for
national income accounting.
iv. MIS is a vital part of the support measures for effective
enforcement of tax laws as well. That is, it helps in
monitoring, administering and controlling the overall tax
system.
v. Finally, the system of MIS is designed to facilitate decision
making process to serve the objectives of tax policy and
administration.
However, accomplishment of the above objectives calls for an
administrative system, which enables the department to have a proper
information flow by using modern computation technology.
Information Needs Analysis
To accomplish the above objectives and to have efficient transport
planning and operation, three sets of basic data are needed. These are
traffic flows; resource cost of transport services; and infrastructural and
operational data of the relevant mode of transport.
(i) Traffic Flows
Data on traffic flows are important requirements for planning. In
case of goods transport such data are to be collected along all important
routes and organized on a continuous basis. Availability of existing data is
not satisfactory1. Systematic information on traffic flows is not available
1

Data regarding traffic flows by road were first collected in 1959 through surveys on 6
trunk routes. Transport surveys were conducted by Technical Groups established by

206

because of multiple agents, preponderance of single-truck operators and

absence of traffic recording and reporting procedures. In view of the
importance of traffic flow data for planning and policy formulation in
respect of goods transport, it is important that the following steps must be
taken as early as possible:

Permanent counting stations should be set up at critical

points on national highways and state highways to measure
traffic flows (including goods carried) and density of
vehicles.

Government should seriously consider making an

independent agency like NCAER/ FPEPR responsible for
carrying out O-D traffic survey regularly every five years.

An inter-ministerial Group comprising officers of the

Planning Commission, the Ministries of Surface Transport,
Railways, Petroleum and Natural Gas be set up to oversee
the surveys and analyze and publish the data for the use of
the planners.

Quarterly reports should be obtained from producers of

major commodities (cement, fertilizers, petroleum, coal,
etc) on the movement of their products, origin-destinationwise. Similar data on food grains should be obtained from
Food Corporation of India.

(ii) Transport Costs

Planning Commission which studied the movement of 15 bulk commodities by various

transport modes. RITES was custom-made by the Planning Commission in 1977-78 for
UNDP Transport Policy Planning Project. RITES conducted a country-wide survey of
inter-regional traffic flows for 3 modes of transport, viz. railways, roads and coastal
shipping. The survey covered 37 commodities and quantified the tonnage and leads for
different modes of transport. In 1980 NTPC submitted a report in which it recommended
that the information on traffic flows and resource cost should be periodically collected.
The RITES later conducted a survey in 1986 which had severe drawbacks in its data
collection. The Steering Committee on Perspective Planning for Transport Development
submitted its report in 1988 recommended that in place of ad hoc surveys once in 5 years,
data collection on goods flows by roads on important routed should be organized on a
continuous basis. However, these recommendations of NTPC and the Steering
Committee on Perspective Planning to arrange for periodic collection of data have not
been implemented.

207

Though assessment of road transport costs is very important yet

there has not been any systematic flow of information. A study on road
users cost was commissioned by the Ministry of Surface Transport
(MOST) in 1980s under the World Bank funding. But, still periodic
studies need to be undertaken for updating revision of road users cost.
(iii) Operational Data
In general, motor vehicle transport and in particular, truck
transport is predominantly in the private sector. Except for the statutory
registration of vehicles, there is serious lack of data in goods transport in
respect of ownership pattern of vehicles, nature of operations, fleet
strength, fleet utilization, cost of operation, tax structure, age profile of
vehicles, etc. Further, there is complete absence of data regarding output
of trucks in terms of tonnes carried, tonne kms transported, proportion of
empty trips, etc. Though truck transport accounts for a significant capital
formation, no precise information is available about it. It is also not known
which group of operators is making investments and how they are
financed, i.e. the extent these are financed by financial institutions and
through personal savings.
Directorate of Transport Research (DTR), Ministry of Surface
Transport presently collects and publishes data on registered motor
vehicles, and MV tax rates in the States. However due to non-cooperation
on part of the States, there is a time lag of 2-3 years in the publication of
data on road transport.
To assess the true picture of transport industry, it is suggested that
the regional transport authority (RTA) or District transport authority
(DTA) or state transport authority (STA) should compile and computerize
the data annually with regard to goods transport vehicle population, form
of ownership, number of operators, vehicle fleet by age, carrying capacity
etc. Once this is done the DTR can access this and publish the data
promptly.
(iv) Inter-State Operations Data
Information regarding the following parameters would be required
for inter-state use.
1. Registration of vehicles.
2. Driving licenses issued to drive transport vehicles.

208

3. Issue of National Permits and authorization of operation of

vehicles.
4. No Objection Certificate issued for transfer of ownership,
change of residence, etc.
5. Road accidents
The above data along with the information regarding vehicle
population could be placed on the National Grid for inter-state access.
MIS in Indian States
MIS in Indian states is at present at a rudimentary stage. Most of
the states have, however, made intense efforts to introduce requisite MIS.
While the efforts of different states vary, many of them have attempted to
modernise the existing system. Andhra Pradesh, Delhi, Karnataka,
Maharashtra and Tamil Nadu have made headway in computerising and
introducing requisite MIS, efforts are also being made by the other states.
The operations of MIS are divided into unit, checkpost, division,
headquarters organisation and the computer centre. Effective efforts have
been made to computerise operations of all these wings of the department.
All the procedures of operations of the tax (such as registration, issue of
permit, record of payment of tax etc.) are handled through computer.
The operations at the district office require the officer concerned
(i.e. Regional Transport Officer) to maintain a master file of each vehicle/
owner2, which is opened at the time of registration of a vehicle. All data
pertaining to the activities of the vehicle are put into the master file. In
addition, the office of the Regional Transport Officer (RTO) could replace
all manual registers and master files in the computer. On the basis of the
information from various sources, each unit office has ready information
according to tax paid and vehicles classified as per turnover, movement of
goods, ownership etc. Notices and reminders are issued by the district
office through the computer.
At the level of check-post all the relevant information is fed into
the computer for all consignments passing through check-posts. The
functions assigned at the check posts include:
2

There are 8.96 crore registed vehicles in the country. All the vehicles must have a master file
with a unique registration number.

209

Validation of consignor and consignee;

Capturing data from the waybills of the transporters;
Issuance of transit passes; and
Tracking blacklisted vehicles and missing waybills.

The personnel at the check-posts affixes adhesive entry pass on

waybill and verifies genuineness of consignor and consignee. The checkposts also provides information on "overcheck" vehicles3 or overloaded
vehicles.
The middle tire of administration in the motor vehicles tax
department comprises divisional office. At this level the information
received from the district office is collated and compiled to prepare
consolidated statements for the region. In addition for reviewing the
performance of RTO on the basis of the information so received, the
consolidated statements help the department in analysing trends in the
revenue. It also enables the department to review the performance of the
RTO.
The central computer wing at the headquarters maintains master
file of each vehicle. Also, it maintains data on revenue and turnover for
the whole of the state. It also records information on the flow of goods
from check-posts. It has access to the information from the RTO office as
well as from the divisional office. The central computer wing is, therefore,
the data-warehouse for the department and brings out reports to analyse
the operations of tax in the state.
Activities of an Integrated Information System
MIS systems of different countries (including that of the Indian
states), highlight the integrated character of the MIS. It shows that all the
activities are interwoven and aim at achieving desired objectives of the tax
administration. Various ingredients of the MIS comprise the following
aspects.

This refers to crossing of another check-post within the state after it has been checked once.

210

Master File Maintenance: The first and the foremost job of the system
is to prepare a master file of all the registered vehicles. This helps creating a file
of potential taxpayers from every available source, such as motor vehicles tax
records and computer files of business income, and other published sources.

Payment of Tax: The integrated information system pre-addresses

MVT Tax Payment Forms/Permit Fee Forms. It enters payment data and
other accounting transactions to the master file of the vehicles. It helps in
identifying delinquents (those who fail to pay the tax) and to print and
mail delinquent notices. The overall system enables the department to
enter information in the master file of vehicles
Management Information: The integrated system provides
complete accounting summary. This is prepared by type of motor vehicle
and by location of vehicle registered with the owner of vehicle. Similarly,
the system should prepare management analysis, such as comparative data
about amounts collected for several tax periods.
Proposed MIS for Motor vehicles tax Administration
The analysis of the activities of integrated information system
presented in preceding paragraphs suggests that except for a few states
where the efforts have significant impact, in other states, the attempts are
ad hoc, and the treatment meted out to the MIS is usually casual. With a
view to improving the existing information system in the motor vehicles
tax administration of the states, it is important to reform the systems on the
lines suggested below:
First, it is essential that we adopt a suitable computational
technology for proper motor vehicles tax management. In view of vast
improvements in computer technology it is absolutely necessary that a
requisite system, suitable to the structure and administrative reforms of the
state concerned, is adopted. In adopting computer technology we have to
keep in mind the capacity of the computer system to be adopted. Indeed, it
should not be too big creating problems of under utilised capacity. In
selecting the system one must also keep in mind the principle of Keep it
Simple. Similarly, requisite education and training to the staff using the
computer is essential for its success. Hence, it is important to work out
details of overall requirements of the operations of the tax.
Secondly, the following functions could be performed by the
computer section (called EDP Unit.):

211

i) Tax payer identification number (TIN), as stated earlier, has to

be created for each payer;
ii) A sub-system of the EDP unit should be intimately linked with
the overall process of motor vehicles tax management. This
unit would receive information [through the bank in most cases
(and direct in cases where the tax is paid to the RTO office)]
about the payment of tax by each vehicle. Also, this unit would
be able to perform the arithmetic checks about the correctness
of the data received from the tax-payer. The documents should
be processed in batches as received from the bank. The
advantage in handling information through batches is that the
discrepancies could easily be reconciled at the local office
when sent for resolution of the errors; and
iii) The sub-system of the EDP unit would also be useful for
keeping accounting records of the flow of revenue. It would
also determine the exact amount due and validate the batch
control sheets with the balance control documents.
The above functions of the EDP Unit could be a part and parcel of
the motor vehicles tax management. Each of the activity has its important
role and should be seen as an integral part of the system.
With a view to doing so, it is important to have structural changes
at the Headquarters Organisation relating to the Research and Statistics
wing. Currently, this wing does not exist in any of the States As the
information system is becoming increasingly important, a Research and
Statistics Wing (RSW) must be developed in each state. It should be
manned by a senior official from the department, and support staff should
include a fully-trained statistician. It is proposed that this person could be
taken on deputation from the Directorate of Economics and Statistics in
the state concerned.
Third, it is important to make some changes in the system of
documentation. The flow of information could be used in two ways. First,
the entries would be made in the master file of the vehicle. Second, the
computer would indicate the files of those vehicles which have not paid
the tax to the unit office. The computer centre would then issue reminders
directly to the vehicles. It is a recognised fact that the failure of the
department to promptly handle the delinquents is a major way. It is in this

212

context that the reminders from the computer centre with the use of the
master file would help the department reduce the rate of delinquency in
the motor vehicles tax administration.
Fourth, in addition to collecting statistics from the returns and the
related documents received from the check-posts, it is important to collect
some information about the vehicle. To collect such information a new
performa should be devised. This should be sent by the unit office to the
computer centre giving further details about the vehicle.
Apart from the above system of sending vehicle-wise information
to the computer centre, it would be useful to have a consolidated statement
about the position of registrations, collections and arrears, as on 31st
March of every year. This statement can be used as an input by the
computer centre to prepare the statistical profile for the state as a whole on
all these aspects.
Finally, since the EDP unit is important for all the states, each state
would be required to develop necessary software for the functions
mentioned above. It would be duplication of efforts and waste of resources
to develop similar software packages independently for each state. Since
the procedural problems would almost be common, it would be desirable
that the states pool the resources to have a common unit for developing
computer software packages. This would help developing extremely
useful software packages at the lowest cost.
Pre-Requisites of MIS
It is however important to recognise that prior to introduction of a
comprehensive MIS, some pre-requisites have to be fulfilled. These could
be enumerated as follows:

Organisational re-engineering is the first pre-requisite to have a

computer environment.
While locating computers in the district offices and in the
headquarters organisation, easy functional allocation is
important when the key information is stored in the computer.
Equally important aspect relates to human resource
development. It is necessary to develop proper training and
skills development programme for those using the system.

213

Incentives for those using and developing software would

prove to be very useful in the long-run.
It is also important to develop a support legal framework for
the use of the computer, which in cases replaces the existing
notices etc.

While the above pre-requisites are essential features that must be

fulfilled, the most important aspect is the commitment by the senior
officials to get the same implemented.
To conclude, the MIS, a recent advance in computer technology is
designed to provide tax management with integrated, all-encompassing
information on the dynamics of an organisation in its entirety. An
integrated information system could be used in all the states for all the
aspects of tax-management such as registration, tax payment, and
identification of delinquents. This is an extremely important area to
improve motor vehicles tax management in India.

214

Exhibit 9.1
Proposed MIS for Road User Taxes in India

Transport
Commissioner

Spot
Surveys

Dy. Comm.
Transport (Statistics
& research)

Output

Input
Processin

Addl. Commissioner
transport (Administration)

Data Storage

Appellate

Addl. Commissioner
Enforcement

Dy. Commissioner
Transport (Range)

Fines &
Penalties

Driving
School

Flow of
Information from
Check Posts

RTO

Trends in
Registrati

MVT

Trends in
Tax

P&GT

Driving
Training

Trends in
Permit

Nationa

Issue of
Licenses

Region

215

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